SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI
B U S I N E S S

Banking laws to be changed as per WTO norms: FM
Mumbai, August 28
The government has decided to bring about amendments in banking laws in the country so that they confirm to the requirements of the World Trade Organisation, Finance Minister Palaniappan Chidambaram said here today.

Ceiling for loans in credit scheme raised to Rs 1 cr

New Delhi, August 28
Prime Minister Manmohan Singh will present the national awards for outstanding achievements in the fields of entrepreneurship, research and development and quality products in the small-scale sector at the annual SSI convention on Monday.

Union Minister for Small Scale, Agro and Rural Indistries Mahaveer Prasad and Secretary, SSI, B.M.Minhas at a press conference in New Delhi on Saturday.
Union Minister for Small Scale, Agro and Rural Indistries Mahaveer Prasad and Secretary, SSI, B.M.Minhas at a press conference in New Delhi on Saturday.
— Tribune photo by Mukesh Aggarwal


Philippine President Gloria Macapagal Arroyo promotes a car-less day sticker for motorists as she campaigns for energy conservation among the public and government officials in Manila on Saturday
Philippine President Gloria Macapagal Arroyo promotes a “car-less” day sticker for motorists as she campaigns for energy conservation among the public and government officials in Manila on Saturday.
— Reuters

THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
Iranian women pass by a shop in Tehran on Saturday
Iranian women pass by a shop in Tehran on Saturday. Window shoppers in Iran will no longer have the pleasure of looking at women’s underwear or buying a variety of pets, according to new police rules. According to the student news agency ISNA, shops have been barred from displaying lingerie in their windows — with the display ban also applying to ‘unveiled mannequins with noticeable curves.’ — AFP

HP to develop infrastructure
Solan, August 28
While stressing the need for extending more cooperation between the Himachal Pradesh government and the industry, the Additional Chief Secretary (Industries), Ms Renu Sahni Dhar, said this was mandatory to develop quality infrastructure in the state as it was attracting big industrial houses after the announcement of new industrial package.

LG to tap rural market
Chandigarh, August 28
LG Electronics plans to tap the rural market by opening more remote area offices in the country. To meet the requirement, the company already has a Rs 500-crore plant in Noida spread over 47 acres and made another one at Ranjangaon (Pune) functional this month.

EARLIER STORIES

 

India has 27m jobless: Ola
Kolkata, August 28
Union Labour Minister Sis Ram Ola today said the country has at present 27 million unemployed people and the unemployment rate was more than 7 per cent.

Aviation Notes

Money transferred by NRI non-taxable
Q: Please clarify the tax implication in case the amount is transferred by a person from abroad to the a/c of his relative in India. The person has gone out of India on employment tour in March 2004 and is coming back to India in November, 04. Is that person is liable to pay tax in India on salary received by him abroad during his stay outside India.

  • Securities transaction

  • TDS and seniors

Investor guidance

More IA flights to Gulf
THE Indian Airlines will launch several more fights to the Gulf, a very lucrative destination. In view of high-load and huge demand, the IA will operate from December this year daily flights to Sharjah from Trivandrum, Bangalore and Mumbai. The airline has already started operating additional flights on the Lucknow-Sharjah sector and the Amritsar-Sharjah route.

  • Bangalore airport

  • Aviation outlay

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Banking laws to be changed as per WTO norms: FM
Tribune News Service


  • Chidambaram favours merger of banks to acquire global scales
  • Admits condition of coop banks poor
  • Calls for distributing more rural credit

Mumbai, August 28
The government has decided to bring about amendments in banking laws in the country so that they confirm to the requirements of the World Trade Organisation, Finance Minister Palaniappan Chidambaram said here today.

Addressing the annual general meeting of the Indian Banks Association, Mr Chidambaram said Indian banks would have to prepare for the challenges under the WTO and Basel II norms.

While the WTO norms come into force next year, the Basel II norms will become applicable in 2006. “We need to prepare a regulatory regime to deal with them. The government is aware of the need for suitable amendments in laws,” Mr Chidambaram said.

The Finance Minister also noted that the government was keen on banks merging to acquire global scales and added that the government welcomed merger proposals. “Consolidation is the name of the game in virtually every sector. Consolidation alone will give us the strength, the muscle, the size and the scale to act like world-class banks,” the minister said.

Acknowledging the poor condition of cooperative banks in the country, Mr Chidambaram said there was an urgent need to put in place a new regulatory regime for them. “We must put in place a single-tier regulatory regime for cooperative banks.”

Mr Chidambaram also made use of the occasion to urge banks to disburse more rural credit. He noted that agricultural credit to the tune of Rs 1 trillion would help farmers cope with the problems caused by the erratic monsoon this year.

Regarding the government’s efforts to curb inflation by reducing duties, Mr Chidambaram noted that the country’s finances had been badly hit by reduction in customs and excise duties.

Inflation has fallen to 7.94 per cent from 8 per cent despite rising oil prices as lower duties made imports and locally produced steel cheaper. Mr Chidambaram added that interest rates were likely to be stable in the near term.

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Ceiling for loans in credit scheme raised to Rs 1 cr
Tribune News Service

New Delhi, August 28
Prime Minister Manmohan Singh will present the national awards for outstanding achievements in the fields of entrepreneurship, research and development and quality products in the small-scale sector at the annual SSI convention on Monday.

Minister of Small Scale, Agro and Rural Industries Mahaveer Prasad told newspersons here today that a special feature of these awards will be the presentation of the National Award for Outstanding Woman Entrepreneur of the year and the National Award for the Outstanding SC/ST Entrepreneur of the year. The period from September 2003 to August 2004 is being celebrated as the golden jubilee year of the Small Industries Development Organisation (SIDO).

Mr Prasad said the ceiling for loans under the Credit Linked Capital Subsidy Scheme had been raised from Rs 40 lakh to Rs 1 crore.

The rate of subsidy under the scheme has also been raised from 12 per cent to 15 per cent.

The scope of the scheme has been enlarged by adding more sub-sector and technologies eligible for assistance. He said SSI units were being encouraged to obtain credit rating.

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HP to develop infrastructure
Our Correspondent

Solan, August 28
While stressing the need for extending more cooperation between the Himachal Pradesh government and the industry, the Additional Chief Secretary (Industries), Ms Renu Sahni Dhar, said this was mandatory to develop quality infrastructure in the state as it was attracting big industrial houses after the announcement of new industrial package.

Addressing an interactive session, organised by the CII at Baddi today, Ms Sahni urged the CII to bring such issues to the notice of government. On the long pending demand of industrialists to construct a link road between Baddi and Chandigarh, she said the matter would be taken up with the Punjab government.

Mr B.S.Nainta, Director, Industries, while endorsing the concern of the industry for better infrastructure development in the region said the government was appropriately planning in the matter. He informed that as many as 367 new industries had been registered and an amount of Rs 5367 crores had been invested in the state after the announcement of special incentive package.

Others present on the occasion included the Deputy Commissioner, Mr Rajesh Kumar, Chief Engineer, Housing Board, Mr S.K.Kanwal and Industrial Adviser to Himachal Pradesh, Dr Rajinder Chauhan.

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LG to tap rural market
Peeyush Agnihotri
Tribune News Service

Chandigarh, August 28
LG Electronics plans to tap the rural market by opening more remote area offices in the country. To meet the requirement, the company already has a Rs 500-crore plant in Noida spread over 47 acres and made another one at Ranjangaon (Pune) functional this month. LG has tied up with OEMs (other equipment manufacturers), including one at Baddi, Himachal Pradesh.

Stating this after a familiarisation tour of LG’s Noida plant for journalists from north India, the Managing Director of the company, Mr Kwang Ro Kim, said the Pune plant, which currently manufactures colour TVs and refrigerators only, would be fully functional by 2006.

“We already are market leaders in the colour TV, microwave oven, refrigerator and washing machine categories, according to an ORG market survey. Our vision is to have a $ 2.5 billion turnover by 2007,” Mr Kim says. The company’s present turnover is Rs 7,000 crore ($ 1550 million).

Interestingly, the company believes in hiring sons of the soil as merely 16 Koreans have been employed in this Korean company that has total staff strength of more than 2,000. For sourcing its products, LG has 30 per cent dependency on Korea and the rest on India.

The Pune plant is spread over 50 acres and currently has a capacity to manufacture one million CTVs and an equal number of refrigerators per month. A Rs 80-crore compressor plant has been set up on the Noida campus. The company follows the digital manufacturing system technology, enabling the production of various products on the same line.

The company is also into PCs, GSM mobile phones, air-conditioners and vacuum cleaners, wherein it has been a rather late starter thereby losing the opportunity of taking the early-bird advantage. However, Mr Kim points out: “The strategy has worked well for us. Latecomer means latest technology as the company intends to move in step by step, product by product.”

Among its products, refrigerators have shown the maximum growth of 63 per cent against the market average of 9 per cent while the company holds 43 per cent market share in microwave ovens. The company’s main thrust market is in north where it has found greater brand acceptability. The market distribution is the least in the east.

In the IT segment, the company makes PCs, notebooks, monitors and optical drives. “We plan to launch 40” LCD TFT and optical rewritable DVDs by September,” a company official says. LG also intends to make CDMA phones by 2006 and has come out with a Micom display for refrigerators through research and development innovations.

LG’s R & D cell also has patents in linear compression technology and golden eye technology in refrigerator and CTV product categories, respectively. In the projection TV category, it intends to come out with digital light processing technology and LCD projection TVs.

When asked about the price reduction in the plasma TV category, the market being price sensitive and not driven by volumes, a company official denied any immediate price cuts.

The company has earmarked a budget of Rs 2.5 lakh per month for philanthropic activities and has tied up with NGOs like HelpageIndia and Prayaas.

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India has 27m jobless: Ola

Kolkata, August 28
Union Labour Minister Sis Ram Ola today said the country has at present 27 million unemployed people and the unemployment rate was more than 7 per cent.

“We need an industrial and production policy, which can provide employment to lakhs of people and at the same time take the economy forward,” Mr Ola said here while speaking at a national conference on Strategies to Leverage Employment Generation: Unleasing Sectoral Potential’ organised by Ficci.

The government was examining the possible labour reforms under the UPA’s policy of globalisation with a human face. There was need to stress on the unorganised sector because about 93 per cent of the total workforce was employed there. — PTI

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Investor guidance

by A.N. Shanbhag

Money transferred by NRI non-taxable

Q: Please clarify the tax implication in case the amount is transferred by a person from abroad to the a/c of his relative in India. The person has gone out of India on employment tour in March 2004 and is coming back to India in November, 04. Is that person is liable to pay tax in India on salary received by him abroad during his stay outside India.

— Vinod Gupta

A: For the FY 04-05 this person you are referring to, is an NRI. His income abroad during April-November 2004 will not be taxable if he is employed by a foreign entity. His income for March 2004, however, will be taxable in India since his status for FY 03-04 is Resident Indian.

Transfer by itself does not create any tax liability. If the money transferred is capital in nature the question of paying tax thereon does not arise. Transfer or remittance per se is not taxable. Taxability has to be determined at the first instance when the income is earned. Later, the mere act of remittance either to a resident account or to a non-resident account has no tax consequence. If the person transfers the money to a relative as a gift, the same will be tax-free if the donee is a relative as specified in the act and if you have followed the proper procedure for the gift.

Securities transaction

Q: The latest Budget announcements allow day traders to set off the transaction tax paid against the tax on their profits. If the normal tax payable turns out to be lesser than the transaction tax, then would the investor be given a refund by the tax department?

— P. Gokhale

A: The fine print has yet not come out. Based on what’s known as of now, the Securities Transaction Tax (STT) can merely be adjusted against tax on normal business income. It is not in the nature of TDS where any extra paid can be claimed back. Else imagine the situation where a rather amateur day trader pays an STT of say Rs 50,000 but actually makes only so much profit that the tax payable works out to Rs 5,000. In such situations, I do not think, the government would be generous enough to fork out Rs 45,000 back. Plus it would lead to all sort of “arrangements” amongst players to stay tax neutral. Therefore, in all probability, the adjustment of STT may be limited to the tax payable on business income. Extra, if any, would have to be foregone.

TDS and seniors

Q: Rules of Senior Citizen Savings Scheme has now been notified. The provisions of TDS is unclear and some of the post offices (in Trivandrum) has informed senior citizens that TDS will apply in all cases. Senior citizens can submit form 15H and claim no deduction as long as the tax liability is NIL as opposed to total income is less than taxable limit (Rs 50,000) as in the case of assessees below 65 years.

— Mahadevan Singokulam

A: It is my considered opinion that TDS is not applicable on this new scheme. Some post masters in some locations cannot take a view on this subject and start applying TDS, unless there are clear-cut instructions for them to do so and rate of TDS is specified.

I request you to bring this irregularity to the notice of the Small Savings Commissioner whose office is in Nagpur.

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Aviation Notes

by K.R. Wadhwaney

More IA flights to Gulf

THE Indian Airlines will launch several more fights to the Gulf, a very lucrative destination.

In view of high-load and huge demand, the IA will operate from December this year daily flights to Sharjah from Trivandrum, Bangalore and Mumbai. The airline has already started operating additional flights on the Lucknow-Sharjah sector and the Amritsar-Sharjah route.

The Indian Airlines operates the maximum flights to Gulf and has successfully been handling the ethnic traffic on this busy route.

The national carrier has embarked upon several other schemes which will be put into operation as soon as the fleet acquisition is achieved. The IA board has cleared a proposal to buy Airbus aircraft and is now awaiting government clearance. Similarly, the Indian Airlines subsidiary, Alliance Air, is planning to lease Airbus A-319. As soon as these aircraft arrive, the ageing Boeing 737s will be replaced.

Bangalore airport

Work is progressing satisfactorily at Bangalore International Airport, which is India’s first, private-sector led national airport at Devanahalli. Designed to meet international standards, it will accommodate at least 20 aircraft of different types.

The budget estimate for building this airport is Rs 1300 crore. The Minister of State for Civil Aviation, Mr Praful Patel, has gone on record saying that the clearance for the airport took longer than it should have because it had an altogether different conception.

Aviation outlay

Judging from the outlay approved for civil aviation for the first two years of tenth Plan, it appears that the government does not attach the importance that this vital sector requires it. The experts feel that the progress will be slow in modernising airports and it will affect promoting aviation and tourism in the country.

The Parliamentary Standing Committee has raised several objections against the authorities concerned. It has also criticised the Airports Authority of India for delays in projects which are running behind schedule.

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BRIEFLY

TCL
New Delhi, August 28
TCL India Holding Pvt. Ltd, a subsidiary of the TCL, one of the largest consumer durable manufacturers of China yesterday announced to launch its wide range of electronic and communication products. The company plans to invest Rs 100 crore in an integrated manufacturing plant, to be functional by June 2005, which will manufacture initially the CTVs, air conditioners, refrigerators, mobiles and later computer hardware. — TNS

Awarded
Chandigarh, August 28
The implementing force behind the unique model of IT integration in Fortis Hospitals, Mr Sunil Kapoor, Chief Information Officer, has been adjudged the best CIO during the Dataquest and CIOL C Change award function. Fortis Healthcare Ltd, was declared the overall winner in the under Rs 1000-crore category. — TNS

Simtools
New Delhi, August 28
Simtools Ltd has become a wholly owned subsidiary of Voltas Ltd, a Tata Group’s white goods company, and its paid-up capital stands reduced to Rs 29.49 lakh. Simtools had paid the consideration of Rs 313 per share to shareholders concerned in lieu of their shareholding. — UNI

Whirlpool
New Delhi, August 28
Home appliances firm Whirlpool India Ltd today announced its decision to delist from the Delhi and Madras Stock Exchanges.
It said its board had approved the delisting of equity shares of the company from the two stock exchanges. — UNI

New bank ED
New Delhi, August 28
Mr P Subbarao has taken over as the Executive Director of Punjab and Sind Bank. According to a notification issued by the Banking Division of the Ministry of Finance, Mr Subbarao, who assumed the office yesterday, will continue till October 31, 2007. — UNI

Yellow Pages
Chandigarh, August 28
The Finance Minister, Punjab Government, Mr Surinder Singla, released the 11th edition of Yellow Pages Chandigarh yesterday. Chandigarh Yellow Pages, a product of Druckgrafen, is divided into 400 categories and covers the area of Chandigarh, Mohali and Panchkula. — TNS

Allahabad Bank
Chandigarh, August 28
Mr S.K. Goel has taken charge as Allahabad Bank Executive Director. He was General Manager of Andhra Bank before this. — TNS
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