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Monday,
November 12, 2001, Chandigarh, India  
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Electronic products cheaper this season
Canpeps-92
Spread investments over other areas
Ensure proper weight of package
Cement stocks record gains |
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Electronic products cheaper this season Ludhiana A survey of leading dealers of white goods revealed interesting facts. Mr Inderjit Singh Talwar, proprietor of Talwar Electronics here, said, ‘‘No doubt the price of all brands have been slashed by the companies, but the general recession in the world and the continuing war in Afghanistan have badly affected the purchasing power of people of all sectors, especially those working in hosiery, bicycle and machine tool industries. The fall in sale is anywhere between 30 to 40 per cent as compared to the sale during last year's festival season.’’ He disclosed that the market of colour TVs and refrigerators was mostly dominated by LG, Samsung, BPL, Whirlpool and Godrej. "The BPL has slashed down prices up to Rs 1,000 as compared to the corresponding period last year. It is offering 21" colour TVs between Rs 6,840 and Rs 11,740. The company is also offering a Titan watch or a magnum travel bag besides tempting exchange offers," he said. Mr Baldeep Singh, manager of Bedi Electronics, another leading showroom, said, ‘‘The foreign companies, like Sony and LG, do not depend on price cuts to boost their sales. In fact, the customers purchase their products despite exorbitant prices as they feel that these brands represent the best quality. Even the farmers are preferring to buy CTVs, including costly ones, than black and white TVs, perhaps due to good crop of paddy. The purchase of CTVs has significantly increased by 25 to 30 per cent in the rural market.’’ The Sony has also introduced flat screen models with digital reality creation (DRC) technology. Its models are available between Rs 25,000 and Rs 80,000. The customers can buy these models with an assured gift and a scratch card, which may win them gifts worth crores of rupees. The LG has slashed its prices by Rs 1000-Rs 2,000, but its advertising campaign is focussing on free gifts worth Rs 12 crore through draws, which is being offered to all the customers purchasing LG products during this festival season. According to an official of the Deekey's LG Shopee, an exclusive showroom of the company, the sale started picking up after the introduction of this scheme. He said that the LG's 14" colour TV was now available at Rs 8,000 and 20" CTV for Rs 10,500. "The company has introduced 43" TVs for the premium class at a price of Rs 1,45,000. Now the customers can buy a 175 litre LG refrigerator for Rs 9,500 and a frost-free 230 litre refrigerator for Rs 16,500 as against the prices of Rs 10,400 and Rs 15,000, respectively, which prevailed just few months ago," he added. Regarding the changing trends in the market of consumer durables, Mr Baldeep Singh said, ‘‘The share of urban customers, purchasing through finance schemes, seems to have come down this year in comparison to the share of rural buyers. The financiers now think twice before providing a loan to the police officials, property dealers, media persons and taxmen due to their poor record in repaying loans. The rate of rejection of their loan applications is around 20 per cent. On the other hand, the market of rural customers buying through finance schemes has increased by 20 to 25 per cent in the region.’’ Prof P. S. Rangi, senior economist (marketing), Department of Economics and Sociology, Punjab Agricultural University, said, ‘‘The good paddy crop and subsequent smooth payments to farmers to the tune of Rs 5,500 crore are expected to give a boost to the sale of all the consumer durables. Though payments worth around Rs 500 crore are still pending, the dealers can hope to earn good margins, provided they concentrate on rural customers.’’ According to dealers, BPL models of CTVs and refrigerators are quite popular among the middle-class people. Mr Ravinder Kumar, a bank employee, clarified, ‘‘The quality of BPL is good and the prices, too, are less as compared to the foreign brand products. Besides, the after sales service and the reliability of the dealers are the determining factors while taking a purchase decision.’’ Interestingly, in case of washing machines, the customers prefer branded semi-auto and auto models. The locally made washing machines have few takers. According to Mr Talwar, "The salaried class people are purchasing washing machines, microwaves and even air-conditioners this year as they already have TV and refrigerator.’’ The BPL is successfully competing in this market with Whirlpool, LG and Samsung. The customer can buy a BPL washing machine for Rs 8,500 (5 kg capacity), Rs 9,000 (6 kg capacity), and semi-auto Charisma model of Samsung for Rs 10,000. And he will get many freebies in addition. However, he will have to spend Rs 14,500 to get LG auto-washing machine with 4.5 kg capacity. The LG's air-conditioners are available in the price range of Rs 21,000-Rs 25,000. ACs of Carriers can be purchased for a price between Rs 23,000 and Rs 30,000, depending upon the tonnage capacity. Attractive gifts and lucky coupons are also given to the customers along with the purchased items.
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R.N. Lakhotia Q: I purchased “Canpeps-92” of Canbank Mutual Fund 600 number @ Rs 10. Total amount Rs 6000 in the year 1991 (30.3.91) under Section 80 CCB of I.T. Act, 1991. Accordingly I claimed exemption under Section 80CCB in the I.T. return for the Assessment Year 1991-92. Now while redeeming the same in April 2001 Canbank has deducted Income Tax @ 20% + 2 per cent surcharge total amount 1224. Please clarify whether this tax is applicable on ELSS under Section 80CCB and if so at what rate I am liable to pay tax on this original investment amount of Rs 6000 refunded to me. — Er Ashok Kumar, Bathinda Ans: You are required to show the principal amount of investment in the income-tax return as income of the year. In case the net taxable income results into excess tax deduction due to tax deduction by the bank then you may file your income-tax return and claim refund.
HRA deduction Q: I am working in (P) Ltd. concern at Jalandhar. I had drawn the salary @ Rs 7000 consolidated per month. My income is charged to income-tax for the year 2000-2001 as under- Salary 7,000/-x12 = Rs 84,000 Bonus = Rs 13,995 Total = Rs 97,995 Rs 4,035 has been deducted from my salary as income tax. My employer has not allowed the HRA deduction in my income which was paid by me at Faridkot on the plea that salary being paid in consolidated does not consist HRA. Besides this under Section 80CG, Jalandhar do not fall in list of eligible town for HRA. — Ratanlal Arora, Faridkot Ans: You will not be entitled to any HRA deduction because no separate amount has been paid to you by your employer on account of HRA. However, as per Section 80G you can claim deduction in respect of house rent paid by you. The maximum deduction which is allowed in terms this section is Rs 2,000 per month. Your employer can grant you the benefit of deduction u/s 80GG. However, you should submit Form No. 10 BA. |
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Spread investments over other areas Mr Anand Kumar is the Senior Vice-President and Regional Head — Retail Banking, ICICI Bank. A very cautious investor himself, he thinks investment in equities can be a good option as well, provided one has enough money to spare and knowledge about the market. His 18 years of service has seen a very little investment in equities and most of the savings in regular income schemes and banks. He spoke to TNS about his investment strategies. Initial investments Initially of the 20-30 per cent of my income I saved was primarily spread in fixed deposits, Public Provident Fund and insurance schemes. Being in the services sector right from the beginning, returns with tax saving have always been my priority while investing. I went in for endowment policy (insurance) at that time in which premium was also less. All my investments helped me save tax and gave reasonable returns also. Equities It was only in late 80s that I started concentrating on equities. My main criterion while going in for shares was sound fundamentals of the company. I never lost in the equity market, as I was never very active. Today I hold equities mainly of banks like IDBI, ICICI and Bank of Punjab as I feel the banking sector will look up and pay of well in the long run. Though I have not been an active investor in market, I feel one should invest if one has the risk appetite as equities are the only place where you can get maximum returns. In the coming days, if I have to invest, it would be pharma sector and bio-tech shares. During later years I also started focusing on mutual funds, bonds and debentures. RBI Relief Bonds that offer 8.5 per cent tax-free return are one of the best options today. I invested in Bank of India Mutual Funds, Templeton, and UTI etc. Due to lower risk, debt funds these days are a better option than equity funds. Earlier I also went in for equity related funds and sectoral funds (IT) but in the present day market scenario, one should go in for debt funds, liquidity plans. At present have funds of ICICI Prudential. Where to invest Though it entirely depends upon one’s portfolio, the investments should be spread over a number of areas — banks, insurance, mutual funds and if one wants then equities as well. During the initial years of service, the risk appetite I believe is stronger, but later years of service, safety and tax saving should be the priority. (As told to Shveta Pathak)
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by Pushpa Girimaji Ensure proper weight of package Some years ago, sweetmeat sellers in the country earned huge profits during Divali by weighing sweets along with the cardboard box. As containers became fancier and heavier, and sweets became more and more expensive, consumers woke up to the fact that their losses were also becoming correspondingly greater. With this realisation came the campaign against weighing of sweets along with the container. Today, thanks to the concerted action during Divali by the Department of Weights and Measures as well as some consumer groups, malpractices in this area had come down considerably. Well, the balance may have swung in consumer’s favour there, but in so far as pre-packed goods are concerned, it seems like consumers need to put more weight in their demand for correct quantity in the packages. I say this with particular reference to the recent findings of an Ahmedabad-based consumer group, Consumer Education and Research Society (CERC), in respect of edible oil packages. The consumer group, which tested 60 brands of edible oils sold in market, found many of the packages weighing less than what was marked on the package! And the edible oils tested by them included mustard, groundnut, sunflower, coconut, cottenseed, palmolein and blended oil. Five to 10 grams less in a pack of one litre of oil may not seem to be a big loss to individual consumers, but when one considers the total number of packages that are sold, the combined loss to consumers as a class would be considerable and so also the gain to the manufacturer, points out CERC. This is not the first time that the CERC has found packages weighing less than what is indicated on them. Earlier during the year, as part of its comparative testing programme, it checked eight brands of vanaspati sold in the market and noted that here too the consumer was not getting what he or she was paying for in terms of quantity. Similarly, its checks on packed chilli powder, turmeric powder, mineral water, instant coffee and even milk revealed that in many cases, consumers were cheated on weight. Prior to that, it had weighed 17 brands of toilet soaps and bathing bars and found all of them weighing less. The Standards of Weights and Measures (Packaged Commodities) Rules provide for a maximum permissible error in the net quantity declared on the packages. While it is 2 per cent for edible oils and vanaspati, it is 3 per cent for toilet soaps. And the CERC found 12 brands of toilet soaps and bathing bars weighing less than what is permitted under the rule. Decrying such ‘unjust enrichment’ of manufacturers at the cost of consumers, the CERC has taken up the issue with the manufacturers, the Department of Weights and Measures and in some cases before the consumer court too. All this brings us to the need for the Department of Weight and Measures to strictly enforce the rules in respect of packed goods. Consumers and consumer groups also need to put pressure on manufacturers to ensure accuracy in the quantity that they sell. There is another dimension to this problem. Today, it is not just branded goods that are sold in packages. Even household provisions such as rice, dal and spices are routinely packed and sold by retailers. Since these are not weighed at the time of purchase, a consumer could well be losing considerable amount in quantity. So it is time residents associations acquired accurate weighing machines, checked the weight of packages sold by retailers in the area at regular intervals and forced those found cheating on weight to withdraw the entire batch of underweight packages from the market and also make good the loss to those who have already bought such packs. But remember, whenever you come across packages that are short in weight, preserve them along with the cash receipt till the issue is resolved, because your case rests on this important piece of evidence. Where it is not possible to keep the package for a long time — particularly in cases of food that may deteriorate — it is best to get the packet weighed in the presence of the retailer and may be one or two witnesses, put all relevant details, including the actual weight of the packet and the net weight marked on it on the cash memo or a piece of paper, and get the signatures of the witnesses and that of the retailer or the person who weighed it. |
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Cement stocks record gains Cement stocks made hectic gains last week on the back of the news from the cement manufacturers association that the cement sector is all set to grow at 7 to 8 per cent during the current fiscal year. This provided the necessary impetus to this sector for substantial gains during the week. Larsen and Toubro (L&T) played the pied piper to the other stocks in the sector and they followed it. The news from cement manufacturers association is on the back of 16 per cent growth seen in this sector during the month of September 2001. The strong growth is estimated to continue on the back of lower base last year, post monsoon pick up in construction activity and the reconstruction work in Gujarat. Investors can pick up stocks like ACC, L&T, Grasim and Gujarat Ambuja cement on correction with a six to nine month perspective. Larsen and Toubro L&T had a dream run during the last two days of the week hitting the upper circuit (10 per cent) on both Thursday and Friday. L&T closed the week at Rs 211.25 — a gain of over 29 per cent during the week. Besides the news from the cement manufacturers association, the rumour that the company had bagged a huge order from one of the engineering giants provided the spark. The company, however, denied the rumour. Analysts tracking the stock have attributed the recent surge on the news that the company is close to finalising the de-merger of its cement division. Tisco Tata Steel, also closed firm during the week, gaining over six per cent and closing the week at Rs 82.5. While Tisco’s profitability was affected severely in the first half of the year due to a sharp fall in steel prices, the company is confident that the two initiatives of cost reduction and productivity enhancement undertaken by it will help it tide over the recent slump. The product-mix in the second half will improves as a result of higher production of cold rolled coils. Balaji Telefilms The TV software maker of popular serials ‘Kyunki Saas Bhi Kabhi Bahu Thi’ and ‘Kahani Ghar Ghar Ki’, was in demand during the week. It gained Rs 13 to close the week at Rs 267.25. The news that Alliance Capital Mutual Fund holds an aggregate 6,20,178 equity shares representing 6.02 per cent of the equity share capital of the company seemed to have triggered the buying from retail investors. The scrip has steadily risen by 61 per cent over the past few weeks to its current level of Rs 267.25 from Rs 165.35 on 25 September, 2001. Investors may book profits, as the scrip seems fully priced now. MTNL MTNL closed the week flat at Rs 136.8, despite the fact that the company made its debut on the New York Stock Exchange (NYSE). The scrip got listed on NYSE on Thursday at $ 5.9, and closed at $ 6.15, a premium of over 6.7 per cent to the closing price of MTNL at Bombay Stock Exchange. Ahead of its listing, MTNL soared 33 per cent in less than a month from its recent low of Rs 103.80 on September 17, 2001.
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Inflation dips Tanishq boutique Oriental Bank
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