Sunday, December 9, 2001, Chandigarh, India






National Capital Region--Delhi

THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

UTI not to dump shares: Damodaran
Dubai, December 8
The Unit Trust of India Chairman M. Damodaran today ruled out the possibility of dumping equities in its flagship scheme US-64 as it might have an adverse effect on the market, but threatened to sell non-performing shares to competitor companies at a higher price.

Set up agri export zone on dairy
Panipat, December 8
With a view to boosting the exports of dairy products, meat and products, poultry and piggery in the district, the Panipat District Chapter of the Livestock Enterprises Development Association (LEDA) has been constituted.

PAU shifts focus on hybrid varieties of paddy, wheat
Chandigarh, December 8
Changing global market scenario has forced the plant breeders in this region to re-focus their research in the agriculture sector. From traditional varieties of various crops, experts have started turning to specialised ones.

LSE closure may be considered on Dec 14
Ludhiana, December 8
The Board of Directors of Ludhiana Stock Exchange ( LSE) are expected to consider the proposal submitted by some brokers to formally apply to SEBI to close down the exchange so that the funds deposited by the brokers as base minimum capital (BMC) could be utilised in the LSE Securities Limited, the subsidiary of the exchange.

Invest Smart offers plans
Chandigarh, December 8
Invest Smart India has launched investment plans for different segments of investors. “i Qomfort, iQonfidence and iQapitalise and i Preserve are the new plans under which people from different segments like beginners, retired, etc will utilise” their money said Mr Umesh Sood, Invest Smart.

 

 

EARLIER STORIES
  Maruti bags latest ISO certification
Chennai, December 8
Maruti Udyog Ltd, has been awarded the lately revised ISO certification (ISI 9001:2000) ahead of other automobile giants in the world.

LABOUR LAWS

Calculation of retirement benefits
Q: In calculating payment of gratuity on retirement, would it also attract incentive payments?

AVIATION NOTES

ILS-III working not satisfactory
Come fog in late December and early January, flights may once again be disrupted as the latest Instruments Landing System (ILS) category-III (A) at IGIA is been functioning as satisfactorily as it ought to.

  • No disinvestment

  • Bullet-proof doors

SALES TAX ISSUES

Q: We are engaged in the business of manufacture and sale of wheat flour, maida, suji and other related products being a dealer registered under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956 in the District of Ambala. Please clarify as to what will be the impact of the introduction of the proposed new system of taxation, called, Value Added Tax on flour mills functioning in the State of Haryana? Will it enhance our competitiveness as far as scope of trade relating to wheat products is concerned?




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UTI not to dump shares: Damodaran

Dubai, December 8
The Unit Trust of India Chairman M. Damodaran today ruled out the possibility of dumping equities in its flagship scheme US-64 as it might have an adverse effect on the market, but threatened to sell non-performing shares to competitor companies at a higher price.

“UTI will not dump the shares it is holding just to achieve that objective (increasing the debt exposure in US-64), but was working out schemes to get maximum returns from both non-performing and performing assets,” Damodaran told NRI investors here.

“One of the factors holding the market down now may be the feeling that UTI may download shares to meet redemptions once it accepts NAV-based listing next month. But we are not going to sell to meet fund demands,” he said.

The UTI chief, however, threatened to sell unattractive shares to their competitors at attractive prices.

UTI will offer its stake in companies yielding nothing, to their rivals if these companies themselves did not buy back the shares, he said, adding that “we are concerned only with investors’ interests.”

Damodaran assured the NRI investors in the Gulf that US-64 was firmly on the road to recovery and suggested that investors stay with the fund for better returns.

He told reporters that the US-64, which will be traded on the basis of its net asset value (NAV) from January 1 2002, was being restructured along with other schemes to reduce the equity exposure and increase debt exposure.

Damodaran also said UTI will not launch assured-return close-ended schemes though it may have monthly income schemes with variable returns.

He said the UTI board will consider the recommendations of the Malegam Committee on restructuring India’s largest mutual fund at the end of this month or early next month.

He also clarified that UTI has not yet approached Infosys Technologies with any proposal to convert its entire equity holding in the IT company into American Depository Receipts (ADRs) for offloading them in the international markets.

Damodaran said there is no proposal to convert its 5.6 per cent holding in the it major to ADRs and market abroad to realise a higher value. PTI

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Set up agri export zone on dairy
Tribune News Service

Panipat, December 8
With a view to boosting the exports of dairy products, meat and products, poultry and piggery in the district, the Panipat District Chapter of the Livestock Enterprises Development Association (LEDA) has been constituted.

The decision to constitute LEDA was taken at a recent general body of the chapter held under the chairmanship of Dr Jagveer Rawat, Scientist of Chaudhary Charan Singh Haryana Agricultural University, Hisar. The meeting urged the Haryana and the Central Governments to establish an “agri export zone on dairy” in Panipat district.

It was felt that the organisations such as the Haryana Progress Initiative and Health Agriculture Biodiversity and Information Technology for All round Transformation (HABITAT) should play a significant role in promoting investment of foreign capital in the food processing and catering sector. With that end in view it was suggested that all dairy units from the district should be housed in one “modern dairy enterprises complex”.

To work in this direction LEDA Panipat Dairy executive committee was formed under the chairmanship of Dr Rawat. While Mr Ram Niwas Malik of Nimbari village was elected the secretary, Mr Gurmender Singh of Binjhol was elected the treasurer. Mr Charan Singh of Siwah village was elected the vice-chairman.

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PAU shifts focus on hybrid varieties
of paddy, wheat
Sarbjit Dhaliwal
Tribune News Service

Chandigarh, December 8
Changing global market scenario has forced the plant breeders in this region to re-focus their research in the agriculture sector. From traditional varieties of various crops, experts have started turning to specialised ones.

The Punjab Agricultural University, which has played a pivotal role in ushering the country into green revolution in the 1970s, has started changing its research priorities to focus on the improvement of quality of wheat and paddy varieties to make these competitive in the international market.

Talking to The Tribune in this connection, Dr Govinder Singh Nanda, Director Research, PAU, Ludhiana said “We have shifted our entire energy to develop hybrid varieties of wheat and paddy suitable for this region”.

Elaborating further, he said that already testing of paddy hybrid varieties had started at Kapurthala and other research stations of the PAU. It would take two to three years to develop a suitable hybrid paddy variety for this region.

He said that with the development of paddy hybrid varieties, the area under this crop would be reduced but the yield and quality would improve. Paddy have been transplanted in about 26 lakh hectares in Punjab this year. The government as well as the PAU wanted to reduce the area under this crop to 16 lakh hectares.

Dr Nanda said that because of the extensive cultivation of paddy crop in the state, the level of sub soil water was constantly going down. In fact, a new problem in shape of “deep level of sub soil water” has started cropping up in the state. Farmers have to sink their tubewells very deep to draw water for irrigation purpose. It was a very costly affair.

Coming to wheat, Dr Nanda, who has done excellent work in this field, said that it would take four to five years to develop hybrid varieties of wheat by the PAU. “Our scientists are on the job but farmers would have to wait for some more years to get a good hybrid variety of wheat from the PAU”, he added.

“It is not good for the state to be dependent on a single variety”, said Dr Nanda. “We would like that there should be two to three varieties sown in almost equal proportion in the various parts of the state. Otherwise, in case of the domination of a single variety, its consequences could be harmful for the state at any stage. For instance, if the variety becomes suspectible to any disease at any stage, then their would be panic all around”, he added.

In other areas also like vegetables, floriculture and horticulture, the PAU has started changing its priorities.

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LSE closure may be considered on Dec 14
Manoj Kumar
Tribune News Service

Ludhiana, December 8
The Board of Directors of Ludhiana Stock Exchange (LSE) are expected to consider the proposal submitted by some brokers to formally apply to SEBI to close down the exchange so that the funds deposited by the brokers as base minimum capital (BMC) could be utilised in the LSE Securities Limited, the subsidiary of the exchange. The Board meeting is slated to be held on December 14.

Mr Jaspal Singh, President of the LSE, said: “The management had earlier asked SEBI to allow us to use the BMC, security deposited by the members in the LSE, partially as Settlement Guarantee Fund (SGF ) in the LSE Securities, so that the members could have more exposure at the NSE. However, SEBI asked the management to fully close down the LSE to utilise the amount. Some of the members have asked us now to formally discuss the proposal.”

He added, “We will consider this proposal at the next meeting of the Board of Directors, to be held on December 14. We expect SEBI will take the initiative due to various financial ramifications.

It is learnt that the trading volumes of the LSE has drastically come down from Rs 30-40 crore to just a few lakh rupees. It has forced the management to find a safe way to close down the exchange like the proposals of other regional stock exchanges in the country.

The brokers including a director, have formally written to the management to find a way to use their security about Rs 4 lakh per member with the LSE in the LSE Securities Limited. Under the present rules of SEBI , the only option is to close down the exchange.

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Invest Smart offers plans
Tribune News Service

Chandigarh, December 8
Invest Smart India has launched investment plans for different segments of investors. “i Qomfort, iQonfidence and iQapitalise and i Preserve are the new plans under which people from different segments like beginners, retired, etc will utilise” their money said Mr Umesh Sood, Invest Smart.

While iQomfort is a product for the retired that will help them to manage their retirement funds, iQonfidence is a product for those who have begun their career.

Under schemes, we will provide expert advise to help one to fulfil ones short term as well as long term obligations in a planned manner”.

iQapitalise is a long term equity advisory plan where the investment will be constantly monitored for consistency in performance. One can opt for either a growth plan which is a portfolio of growth stocks that provide a suitable capital appreciation or a value plan — portfolio of intrinsically undervalued stocks that have the potential of becoming future growth stocks.

iPreserve is a customised investment advisory scheme offering investment solutions in mutual funds. “The clients will be advised about their investments in mutual funds, encompassing both debt as well as equity schemes and investsmart will also implement and monitor on behalf of the customer”.
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Maruti bags latest ISO certification

Chennai, December 8
Maruti Udyog Ltd, has been awarded the lately revised ISO certification (ISI 9001:2000) ahead of other automobile giants in the world.

The coveted award has been given as per the recommendation of noted global auditors A.V. Belgium which had conducted a four-day audit of maruti systems and procedures recently.

According to him, the A.V. Belgium in its audit report has said Maruti may consider itself as a benchmark in the worldwide automotive industry. PTI

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LABOUR LAWS

Calculation of retirement benefits
Praful R. Desai

Q: In calculating payment of gratuity on retirement, would it also attract incentive payments?

Ans: The S.C. deciding this point in T.I. Cycles of India, Ambatur, Chennai v M.K. Gurumani (2001-II-LLJ. 1068) held thus.

The authorities were carried away by considering that the bonus is payable on the basis of output equivalent to certain pieces per man-day. But it is made clear in the scheme that each payment will be made not on the basis of pieces of, per man-day nor is it a piece rate work for which wages are paid but it is an additional incentive for payment of bonus in respect of extra work done.

The measure of extra work done is indicated by pieces and not wages as such that are paid on that basis. It is not that in respect of each piece any wages are paid but altogether if certain number of pieces are produced, additional incentives will be payable at a particular rate.

Therefore, the authorities have completely missed scope of the scheme and have incorrectly interpreted the same. In as much as both the H.C. and the authorities have incorrectly understood the position in law and have wrongly held that the concept of ‘wages’ under the Payment of Gratuity Act would include bonus and that even on facts the scheme would attract S.4(2) of the Act.

Proviso to S.4(2) is to the effect that in case of a piece-rated employee, daily wages shall be computed in a particular manner but that is not the rate at which the wages are paid in the present case at all. Therefore, the S.C. took the view that S.4(2) is not attracted in the case of the present scheme with which the courts are concerned.

Hence, the S.C. allowed the appeal setting aside the orders made by the authorities and the H.C. If the payments have already been made to the respective respondents in terms of the order made by the authorities, the S.C. took the view, it does not want to disturb the same in these proceedings which have mainly filed for the purpose of interpreting the provisions of law and the scheme. Therefore, no recovery shall be effected in respect of payments that may have been made pursuant to the orders under appeal.

Subject to the aforesaid directions, the S.C. allowed the appeal.

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AVIATION NOTES

ILS-III working not satisfactory
K.R. Wadhwaney

Come fog in late December and early January, flights may once again be disrupted as the latest Instruments Landing System (ILS) category-III (A) at IGIA is been functioning as satisfactorily as it ought to.

The situation has been further complicated as there has been little rapport between experts of the International Civil Aviation Organisation and officials of the Airports Authority of India (AAI). For certain reasons, functioning of the ILS has been erratic and it may take sometime before the system stabilise.

The ILS category-III A is one of the most sophisticated and reliable land smoothly when the visibility is less then 50 feet from the ground.

The ICAO team, which was here to monitor the functioning of the system, is reported to have said there an minor snags and will soon be sorted out. There is, however, no truth in the observation that the system is not working satisfactorily because of power fluctuation in the airport.

No disinvestment

As the two main bidders — Videocon and the Hindujas — have been disqualified for several technical reasons by the Department of Disinvestment, the government has lifted ban on the Indian Airlines (IA) for augmenting its fleet. The Board of Directors, in its recent meeting, has asked the airline’s Chairman and Managing Director Sunil Arora to provide a detailed and specific proposal for acquiring new fleet of aircraft.

The airline, with the help of some experts, is in the process of preparing several proposals ranging from 50-seaters to 100-seaters for clearance by the Project Investment Board (PIB). The airline will have about 20 aircraft in phased exercise. While buying new aircraft, the airline and its subsidiary Alliance Air will phase out aged aircraft.

Bullet-proof doors

As the aviation and tourism industries are limping back to normalcy, a few international airlines have already introduced bullet-proof cock-pit doors which, according to security officials, can withstand on attack. The airlines have resorted to several other measures to regain the confidence of air travellers.

To reduce incidences of hijacking, the aircraft will soon have close circuit TV cameras, which will be installed at strategic points.

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SALES TAX ISSUES

by A.K. Sachdeva

Q: We are engaged in the business of manufacture and sale of wheat flour, maida, suji and other related products being a dealer registered under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956 in the District of Ambala. Please clarify as to what will be the impact of the introduction of the proposed new system of taxation, called, Value Added Tax on flour mills functioning in the State of Haryana? Will it enhance our competitiveness as far as scope of trade relating to wheat products is concerned?

Ajay Gupta, Sanjay Agro, Ambala Cantt.

Ans: The main objective behind the proposed abolition of the decade-sold sales tax enactment known as the Haryana General Sales Tax Act, 1973 governing the taxability of purchase and sale of goods in the State appears to be to take away the rights of the registered dealers to claim the benefit of single-point tax, sales to registered dealers and sales at successive stages of goods manufactured by the exempted units, and to buy goods without payment of sales tax for use in the manufacture or processing or packing of the finished products.

In fact the state is switching over from single-point tax system to multi-point levy which will make the registered dealers liable for payment of tax on every transaction of purchase or sale of goods, except a few items proposed to be listed as tax-exempted goods (no list has so far been formulated), with a facility to claim input-tax credit against tax paid on purchases. As far as flour mills operating in the state of Haryana are concerned, the sales of wheat flour, maida, suji and packing material already attracted first stage tax and the right to sell these goods on the strength of the registration certificates without payment of tax had long ago been abrogated.

The provisions of the Haryana Value Added Sales Tax Act, 2001 proposed to be introduced from the next financial year provide for levy of tax even on subsequent sales of the wheat products which did not attract any tax liability under the existing enactment as the dealers effecting such transactions used to show them as “Sales of tax paid goods”. The benefit of adjustment of set-off on account of first stage payment of tax will continue to be available to the assesses in the form or input-put tax credit and that this facility will also become available to the traders. It may be pertinent to note here that the benefit of input-tax credit will not be admissible in relation to tax paid on inputs purchased from the places outside Haryana. The new system of taxation is not, in any way, going to enhance the competitiveness of the wheat flour industry as the proposals of the state is obviously to involve subsequent sales of wheat products into the net of taxation.

Q: It was in last week of November that a consignment of goods being carried on our behalf from Delhi to Jagadhri had been intercepted and subsequently detained by an Excise and Taxation Officer for came to be described “Goods detained under Section 37(5) of HGST Act, 1973 for verification”. Kindly clarify if detention of goods is permissible simply on the ground of “verification”?

Narinder Kumar, Jagadhri.

Ans: Sub-Section (5) of Section 37 of the Haryana General Sales Tax Act, 1973, which lays down the procedure for seizure of the consignment, does not authorise detention for “verification” as it becomes the statutory obligation of the checking officer exercising such powers to prove either that the consignment is not covered by proper and genuine documents or that the person carrying the goods is attempting the tax due under the Act. Viewed accordingly, detention of the goods for “verification” cannot be described in the face of the statutory provisions as lawful and fair.

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BIZ BRIEFS

Hafed
Chandigarh, December 8
After a gap of about 10 years, Hafed has entered in the export market and has recently exported basmati to Australia (Brisbane). A spokesman of the Federation said that Hafed was likely to export more quantity of basmati and non-basmati rice in the near future, for which it had requested the Union Government to declare Hafed as canalising agency as had been allowed to Markfed Punjab. TNS

E-Indiabiz.com
Chandigarh, December 8
In order to promote its recruitment services targeted at the nursing fraternity in India, the Indo UK Nurses Association (INUKNA) has entered into strategic tie-up with E-Indiabiz.com, a marketing solutions organisation. The tie up will enable INUKNA to promote its services here. INUKNA will allow Indian nurses to know more about the opportunities in this field in UK. It will provide information and assist nurses to obtain all government related approvals needed to work there. TNS

PSB rates
New Delhi, December 8
Punjab and Sind Bank today announced revision of interest rates on term deposits effective from December 1, 2001. For deposits less than Rs 15 lakh, the interest rates are: 5 per cent for 15 days to 30 days, 5.25 per cent for 31 days to 45 days, 6.5 per cent for 46 days to 90 days, 6.5 per cent for 91 days to 179 days, 7.5 per cent for 180 days to less than one year, 8 per cent for one year to less than two years and 8.25 per cent for two to three years and 8.25 per cent for three years and above. UNI

Forex
Mumbai, December 8
India’s foreign currency reserves rose further by $ 260 million to $ 46,891 million for the week ended November 30. PTI

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