SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI


THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Act to eliminate fiscal deficit notified
New Delhi, July 3
In a landmark development, the government today notified the Fiscal Responsibility and Budget Management Act, which stipulates eliminating fiscal deficit by March, 2008. The Act, which was passed by Parliament last year, also stipulates that fiscal deficit should be brought down by at least 0.3 per cent of GDP and revenue deficit by 0.5 per cent of GDP annually.

Fortnightly revision of petro prices may go
New Delhi, July 3
The government may scrap the practice of fortnightly revision of petrol and diesel prices by giving public sector oil firms limited freedom to revise prices by up to Re 1 per litre on their own but on a less frequent basis.

One-time third party insurance proposed
Chandigarh, July 3
To do away with the practice of getting a motors vehicle insured every year, the government should make provision for getting third party insurance done for the vehicles on lines of the road tax by paying one-time premium.

PNB declares 15 pc dividend
New Delhi, July 3

Having registered a 32 per cent increase in the net profit over the previous year, the Punjab National Bank today declared a final dividend of 15 per cent. The final dividend is in addition to interim dividend of 25 per cent for the year ended March, 2004.

Pak trader favours road route for trade
Amritsar, July 3
Azhar Saeed Butt “The trade agreements between India and Pakistan have slowed down due to the change of government in India,” Mr Azhar Saeed Butt, Chairman, All-Pakistan Traders’ Association, rues. He made a brief stopover here in the city after arriving via the Wagah route today. Talking to The Tribune during his meeting with some top Indian traders, he says Pakistan has still not left hope.

GRAPHICS:
India's Export Growth Target for 2004-05
Weekly Stock Movement (June 25, 2004 to July 2, 2004)



Pratichee, a Viva rock band member, performs at Emvees 2004, an awards night organised for media advertisers, in Mumbai on late Friday evening
Pratichee, a Viva rock band member, performs at Emvees 2004, an awards night organised for media advertisers, in Mumbai on late Friday evening. — PTI

EARLIER STORIES

 

AVIATION NOTES

Mallya’s no-frills airline awaits nod
by K.R. Wadhwaney
"T
he more, the merrier". This seems to be Vijay Mallya’s philosophy. He is planning a no-frill airline. He has already met the Minister of State for Aviation Praful Patel. If he gets the nod to initiate the airline, it will lead to more competition among the domestic carriers. The venture will be floated with a projected outlay of Rs 150 crore.

INVESTOR GUIDANCE

Gross income governs rebate
by A.N. Shanbhag
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Act to eliminate fiscal deficit notified
Tribune News Service

New Delhi, July 3
In a landmark development, the government today notified the Fiscal Responsibility and Budget Management Act, which stipulates eliminating fiscal deficit by March, 2008.

The Act, which was passed by Parliament last year, also stipulates that fiscal deficit should be brought down by at least 0.3 per cent of GDP and revenue deficit by 0.5 per cent of GDP annually.

The Act lays down rules relating to annual targets of reduction in deficits, government borrowings and debts.

The Act, effective from July 5, caps the Centre’s guarantees and total liabilities annually and prohibits the Union Government’s borrowing from the Reserve Bank after April 1, 2006, an official release said.

By undertaking to accept this discipline, the government has put India among the select group of countries which are serious about managing their public finances well and have legislation for ensuring that.

Asserting that the government is committed to undertaking an intra-year assessment of its budgetary targets, the release said “at the end of second quarterly assessment, if the non-debt receipts are less than 40 per cent of the Budget estimate or the revenue or fiscal deficit is more than 45 per cent of the estimate, the government will not only take corrective measures, but the Finance Minister will also make a statement in both Houses of Parliament.”

The Act stipulates that the government gives three broad periodic reports-Macro-economic Framework Statement, Medium Term Fiscal Policy Statement and Fiscal Policy Strategy Statement-to Parliament.

The Medium Term Fiscal Policy Statement will contain a 3-year “rolling targets” for key fiscal parameters that underpin the government’s fiscal correction trajectory.

The Budget for this year will contain the three statements. 
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Fortnightly revision of petro prices may go

New Delhi, July 3
The government may scrap the practice of fortnightly revision of petrol and diesel prices by giving public sector oil firms limited freedom to revise prices by up to Re 1 per litre on their own but on a less frequent basis.

As per the proposal under consideration, oil companies would not alter auto fuel prices if the hike or reduction, necessitated due to a movement in raw material cost (crude oil), is less than Re 1 per litre.

They, however, will have the freedom to raise or lower prices by Re 1 per litre on both if, for a longer period, say a month, such a hike or reduction was necessary.

“The new scheme is being devised to reduce the frequency of price revision. Moreover, it has been observed that if a hike in crude oil price in a particular week or fortnight, due to some extraneous factors, falls in the subsequent fortnight, the overall impact is negligible,” sources said.

Through a year, oil companies can revise prices up to 10 per cent of the current prices.

Sources said the limited revision proposal being worked out by the Petroleum Ministry will be put up before the Cabinet for approval shortly.

Sources said government was unlikely to go back to the control era by setting up a price stabilisation fund. — PTI
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One-time third party insurance proposed
Tribune News Service

Chandigarh, July 3
To do away with the practice of getting a motors vehicle insured every year, the government should make provision for getting third party insurance done for the vehicles on lines of the road tax by paying one-time premium.

Addressing a press conference here today, Mr R. Beri, Chairman of New India Assurance Company said this forms part of the suggestions sent to the Finance Ministry for the Budget .The rate of the premium for the proposed third party insurance should be 6-7 per cent of the cost of the vehicle. Mr Beri said the company, which has 26 per cent share in the insurance market, retained its number one position by doing a premium business of Rs 4,040 crore in the domestic market and Rs 900 crore in the foreign market. The company has set a target of Rs 4,550 crore for their business for 2004-05 with a growth rate of 13 per cent, he said.

With an annual business turnover of Rs 400 crore, the company is placed at the 43rd position in the UK market, besides having offices in 36 countries abroad. 
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PNB declares 15 pc dividend

New Delhi, July 3
Having registered a 32 per cent increase in the net profit over the previous year, the Punjab National Bank today declared a final dividend of 15 per cent.

The final dividend is in addition to interim dividend of 25 per cent for the year ended March, 2004.

The bank has achieved a net profit of Rs 1,109.69 crore during 2003-04 compared to Rs 842.20 crore during 2002-03, representing a growth of 32 per cent.

“I would like to mention that this level of net profit has been achieved after making provisions of Rs 2,012.17 crore towards NPAs, taxes and bonus compared to Rs 1,475.09 crore made in the previous year,” PNB CMD S S Kohli told the third Annual General Meeting of the shareholders here. — UNI
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Pak trader favours road route for trade
Rashmi Talwar

Amritsar, July 3
“The trade agreements between India and Pakistan have slowed down due to the change of government in India,” Mr Azhar Saeed Butt, Chairman, All-Pakistan Traders’ Association, rues. He made a brief stopover here in the city after arriving via the Wagah route today.

Talking to The Tribune during his meeting with some top Indian traders, he says Pakistan has still not left hope.

Crediting the BJP government for its peace initiatives, the chairman says Pakistan traders are pressing upon their government to confer the most favoured nation (MFN) status to India at the earliest so that trade could boom .

Favouring a road route for trade between the two countries, he says maximum benefit could be derived from it. “Pakistan had surplus power that may illuminate the whole of Indian Punjab. Similarly, India may provide cheaper wheat, onions, apples and even newsprint.”
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AVIATION NOTES

Mallya’s no-frills airline awaits nod
by K.R. Wadhwaney

"The more, the merrier". This seems to be Vijay Mallya’s philosophy. He is planning a no-frill airline. He has already met the Minister of State for Aviation Praful Patel. If he gets the nod to initiate the airline, it will lead to more competition among the domestic carriers. The venture will be floated with a projected outlay of Rs 150 crore.

Technical snags

Technical snags and poor visibility at Lucknow were the main causes for delay in Indian Airline’s scheduled flight (IG-601 on June 17, 2004) from Delhi to Lucknow.

The Directorate-General of Civil Aviation (DGCA), in its findings, has ruled out any foul play or conspiracy. The report says that first engineering snags delayed the take-off at IGIA. Eventually, after rectifying defects in hydraulic system, the plane took off but it could not land at Lucknow as the required visibility minima of 2800 metres for a VOR DME (Variable Omni Range Distance Measuring Equipment) approach for landing was unavailable. In view of this, the plane returned to Delhi.

The IA flight was not the only one which was affected because of the poor visibility. The Sahara Airline flight holding over Lucknow had to divert to Delhi owing to poor visibility at Lucknow. Jet Airways had already cancelled its flight.

Cargo movement

As a Airports Authority of India (AAI) is restructuring cargo services and setting up new cargo terminal, India is on a firm road of becoming a more important hub than it has been.

There is a tremendous upsurg in cargo upliftment and airlines — domestic and international — are concentrating on development of the neglected area — cargo. All traders on the domestic routes as also on international destinations are sending their consignments by air instead of by road, trains or by sea. Sending consignments by air means quick turnover of money and this is what traders are looking for. There are occasional hazards of directional imbalances, but operators are unfazed in their belief that cargo is a cash cow in the modern airline industry.Top

 
INVESTOR GUIDANCE

Gross income governs rebate
by A.N. Shanbhag

Q: My income consists of interest from PO MIS and bank deposits. For the year 2004-05, my total income is less than Rs.1.50 lakh. If I sell my equity shares in the current booming market, my total income will cross the level of Rs. 5 lakh. Consequently, I shall lose the benefit of the rebate on contributions already made to the PPF. What I desire to know is whether this amount of Rs. 1.5 lakh (or 5 lakh) is to be computed after subtracting

1. Carried forward long-term and short-term capital losses.

2. Standard deduction from my salary.

3. Section 80L benefit.

4. Purchase of a residential flat.

5. Reinvestment of capital gains in Nabard bonds.

6. Interest on loan taken from my son for purchase of the flat.

— K. Padmanabhan

A: The income levels governing the applicability of rebate u/s 88 are decided by gross total income before giving effect to deductions under Chapter VI A. In other words, while computing this amount, you can take into account all items listed above with the sole exception of deduction u/s 80L etc.

IT returns

Q: My father was a Central Bank Of India, Khamgaon branch, employee. He died in a road accident and we got the medical bill for Rs 3,39,000 from the bank in two parts:

1. By regular methods.

2. By staff welfare scheme.

But my problem is that the bank is deducing 30 per cent from the medical bill amount.

My father died on July13, 2003, and the accident took place on March 21, 2003. He got salary for April. There is no income since April 2003. So under what norms and conditions, should I get the income-tax exemption against the medical?

The hospital does not have the government certification of medical bill exemption to income tax.

You are requested to tell me the right way by which I will tell the bank about the exemption.

— Chinmay Kulkarni

A: The bank has followed the law correctly. It is not possible for you to tell the bank not to apply TDS or apply it at a lower rate. The best method is to file two tax returns, one from April 1 to July 13, 2003, in the name of your father and from July 14, 2003 to March 31, 2004 for the estate of your father. You can claim refund of the excess TDS.
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BRIEFLY

Reserves down
Mumbai, July 3
India’s foreign exchange reserves declined by $ 525 million to reach the $ 1,19,407 million mark for the week ended June 25. The country’s foreign currency assets were down by $ 530 million to $ 1,14,129 million during the period under review, according to the Reserve Bank of India’s weekly statistical supplement released here today. — PTI

India-EU summit
New Delhi, July 3
The next India-EU summit will be held in the Netherlands on October 14, a Netherlands Embassy release here said today. The summit will be preceded by the India-EU Business Summit on October 13. The Netherlands assumed the Presidency of the EU for six months from July 1. The release quoted Dutch Prime Minister Balkenende as saying he was looking forward to the visit of Prime Minister Manmohan Singh to the Netherlands.— TNS

ONGC
Nazira (Assam), July 3
The ONGC has decided to pump in over Rs 1,000 crore to revamp facilities and upgrade technologies in Assam. ‘’Since the company’s operations in the state are over 45 years old and facilities used are obsolete, so we felt the need for revamping the facilities and upgrade technologies in Assam,’’ ONGC Executive Director S. C. Upadhaya told newspersons here last night.— UNI

Amartex outlet
Chandigarh, July 3
Amartex Industries Limited today opened its 21st outlet, the seventh in Haryana, at Rohtak. Regular outlets at Ropar, Rajpura and Sirsa are in the pipeline as per a compnay press release. — TNS

Nabard
Jaipur, July 3
In line with the Centre’s plan, National Bank for Agriculture and Rural Development (Nabard) has issued guidelines to cooperative banks and regional rural banks for doubling of farm credit in next three years, a senior bank official said here today. The process for doubling the agricultural credit in three years would begin with increasing it at least by 30 per cent in the current financial year, Chief General Manager V Ramakrishna Rao said. — PTI

HC directive
Jabalpur, July 3
Madhya Pradesh High Court has directed the MP State Electricity Board (MPSEB) to return Rs 30 crore to Daewoo power project as a part of the first instalment of the security deposited with the bank by the company. A Division Bench, comprising acting Chief Justice Rajeev Gupta and Justice S K Kulshrestha, while hearing a special petition filed by Daewoo Power Project, New Delhi, passed the orders yesterday and directed State Bank of India (SBI), where money was deposited, to make the payment. — PTI

SBP loan cell
Chandigarh, July 3
The Kalka main branch of the State Bank of Patiala has set up a personal loan cell. The cell will take care of various types of loans in different sectors like housing, education, vehicle and trade and promised to conduct all deadlines in the shortest delivery time, a bank release here said. — UNI

Free replacement
New Delhi, July 3
Competition in the vehicles industry getting stronger by the day with more and more models coming into the market, manufacturers have been left with little choice but to satisfy their customers. Honda Siel Cars India has become the second manufacturer in the country to offer free replacement of motor parts which have been found to be defective or not up to the prescribed standards. Experts here pointed out that this offer was as a result of not only the growing competition but also because of the fact that every car manufacturer is trying hard to hold onto its share in the market. — TNS
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