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DELHI


THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Foreign trade policy tomorrow
New Delhi, August 29
The UPA Government will unveil the first ever National Foreign Trade Policy that would contain measures to attract FDI in employment oriented export units to double country’s exports to $ 150 billion by 2010.

UP attracting giants thanks to energy policy
Lucknow, August 29
Taking Uttar Pradesh from a power deficit to a power surplus state within four years is the top priority of his government, said Chief Minister Mulayam Singh Yadav on completing a year in office on Sunday.

EU relief to steel units
New Delhi, August 29
Giving relief to India’s stainless steel industry, the European Union has decided to discontinue anti-dumping duty and countervailing duty on stainless steel wire imports from New Delhi.

Achievers
Surviving IT meltdown, Moser Baer’s next push is DVDs
New Delhi, August 29
Having established a leading position on a global scale in the optical storage media market, Moser Baer believes that the company’s next big push will come from DVD formats.

It’s animation boom now
Chandigarh, August 29
After the IT boom in 1993, India today is on the threshold of a computer-generated animation boom. “And, if we want to encash this boom, we must concentrate on high quality and timely delivery of products demanded by the entertainment industry throughout the world,” says Mr Rajesh Turakhia, Chief Executive Officer of the Mumbai-based Maya Entertainment Ltd.

Market update

Easing oil prices lift Sensex
T
he easing of global crude oil prices led to a gain of 1 per cent in the indices last week. While Sensex gained 52 points at 5117, Nifty gained 18 points at 1609.


A boy applies mehndi on the hands and arms of a Kashmiri Muslim girl at a parlour in Srinagar on Sunday.
A boy applies mehndi on the hands and arms of a Kashmiri Muslim girl at a parlour in Srinagar on Sunday. With the onset of the Kashmiri wedding season, many women are thronging to beauty parlours in Srinagar for the latest designs. — Reuters

EARLIER STORIES

 
  • TCS

  • ITC

Tax advice

Tuition teacher’s tax
Q. My son teaches tuitions to students at home in batches. His gross total income is Rs 3 lakh approximately. He pays Rs 48,000 salary and Rs 36,000 as rent for rooms. Please clarify the income-tax payable.

  • Capital gain

  • Disease and tax

Top








 

Foreign trade policy tomorrow

New Delhi, August 29
The UPA Government will unveil the first ever National Foreign Trade Policy that would contain measures to attract FDI in employment oriented export units to double country’s exports to $ 150 billion by 2010.

The policy to be unveiled by Commerce Minister Kamal Nath on August 31 will encompass Exim Policy as part of efforts to have a comprehensive strategy for both merchandise and services exports.

Contrary to fears that the popular export incentive scheme - Duty Entitlement Passbook Scheme (DEPB) - would be wound up, it will be continued till April 1, 2005 as envisaged in the medium-term Exim Policy.

“The scheme is likely to continue in the present form till the end of this fiscal,” official sources said adding that the government was working out a WTO compatible export incentive scheme to replace DEPB next year.

Apart from measures, including fiscal to boost Special Economic Zones, the government would unleash measures to encourage agri-exports, including duty-free entitlement for import of machinery and other inputs for the sector.

The policy would also contain measures to provide relief to exporters to compensate for the service tax on any of their inputs and 2 per cent education cess by way of duty drawback.

Apart from simplification of procedures, the policy will contain measures for the textiles sector which prepares for the quotas-free regime from January 1, 2005.

A special package is in the offing for the sector, including duty free inputs like embellishments, enhancement in limit of duty free samples apart from other employment generating sectors like agriculture, handicraft, handloom and leather.

It is likely to make special provisions in the existing schemes for exporters who perform well by creating a special window for them. — PTITop

 

UP attracting giants thanks to energy policy
Tribune News Service

Lucknow, August 29
Taking Uttar Pradesh from a power deficit to a power surplus state within four years is the top priority of his government, said Chief Minister Mulayam Singh Yadav on completing a year in office on Sunday.

Addressing a press conference, he listed the achievements of his one-year-old government. He said chronic power shortage had been identified as the root cause of much of the state’s ills, including industrialisation being in reverse gear.

The Uttar Pradesh Development Council Chairman, Mr Amar Singh, who was also present, said an energy policy had been chalked out and industrial giants roped to set up huge power plants in the state in record time. The Reliance Group is to set up a 3740-MW power plant, of which 1500 MW would be for UP. The first phase of this plant to be set up in Dadri, near Delhi, would be complete by 2007.

Similarly, the Tatas have committed to set a power plant of 2000 MW. Kumarmanglam Birla has also pledged to set up a power plant in Uttar Pradesh.

Among the other multinationals keen to come to Uttar Pradesh is GM Motors, claimed Mr Amar Singh.Top

 

EU relief to steel units

New Delhi, August 29
Giving relief to India’s stainless steel industry, the European Union has decided to discontinue anti-dumping duty and countervailing duty on stainless steel wire imports from New Delhi.

The European Union had imposed up to 55 per cent anti-dumping duty and 48.8 per cent countervailing duty on imports of stainless steel wires of more than 1 mm diameter from New Delhi in 1999.

In another case it had put up to 44 per cent anti-dumping duty on stainless steel wires of less than 1 mm from India. — PTITop

 

Achievers
Surviving IT meltdown, Moser Baer’s
next push is DVDs
Gaurav Choudhury
Tribune News Service

Deepak Puri
Deepak Puri

New Delhi, August 29
Having established a leading position on a global scale in the optical storage media market, Moser Baer believes that the company’s next big push will come from DVD formats.

“The next big growth impetus will come from DVD formats, the demand for which is expected to grow from 680 million units in 2003 to over 7 billion units by 2006”, Managing Director of Moser Baer India Limited Deepak Puri said.

The Indian market also offers a significant growth opportunity where the company has the “home field advantage”.

“India has one of the largest music and video industries in the world, publishing thousands of titles each year. India is the second largest compact cassette (audio) market in the world. Hence, India is one of the fastest growing markets for optical media in the world. Moser Baer has a ‘home field advantage’ in this potential Rs 15 billion market,” he said.

Moser Baer is perhaps one of the two Indian companies (the other being HCL) to have established a major space in the hardware arena – an area where India is considerably lagging behind as compared to world standards.

Mr Puri believes that although some infrastructure bottlenecks exist for the growth of the computer hardware sector in the country, India also offers “significant advantages given its large pool of low cost intellectual capital and a fairly developed engineering and chemical industry base”.

While most in Indian IT companies wilted in the meltdown about a couple of years back, Moser Baer cruised along-it doubled production capacity, pushed R&D focus, and notched up over 100 per cent growth in revenues. Mr Puri attributes this to several key factors.

“The key factors of Moser Baer are efficient manufacturing, speed, R&D, quality and cost, supply chain logistics, customer focus, people skills and financial strategy”, he said.

“By engineering and designing our own facilities along with our equipment vendors, we’ve maximized quality and reliability, while reducing our capital investment costs,” he said. Their objective is to be “first-to-market, which means we have got to respond to the twists and turns of the market with speed and agility,” he added.

On the financial strategy, he said as the company operates in a high-growth and capital-intensive industry, efficiently financing the rapid growth is a critical factor driving competitive advantage.

“Over the past five years, we have raised almost $ 350 million from international and domestic leaders and $ 229 million from capital markets,” Mr Puri said.

Mr Puri is among the most successful first generation Indian entrepreneurs to have created a niche in the global arena and he attributes this to “extensive evaluation and leveraging of strengths”.

“We were one of the early players to have recognised the potential in this exciting industry with the global change from analogue to digital,” he said.

In 2000-01, Moser Baer had acquired Luxembourg-based Capco, thereby gaining access to key European brands. Mr Puri said that “the company continues to evaluate various options to grow and maintain its global leadership position and footprint.”

On the new geographies which the company was presently looking at, he said that Moser Baer is focusing on “increasing revenues from markets Latin America, West Asia and South Africa”, besides India.

On the disparities between India and China in the hardware arena, the Moser Baer Managing Director said that India has focused on the services sector while China has invested into manufacturing.

The presence of a very large captive market, higher PC penetration and large global scale technology manufacturing and assembly plants and the emergence of clusters have helped the growth of hardware manufacturing in China, he said.Top

 

It’s animation boom now
A. S. Prashar
Tribune News Service

A character developed by Maya Entertainment Ltd for a foreign client.
A character developed by Maya Entertainment Ltd for a foreign client.

Chandigarh, August 29
After the IT boom in 1993, India today is on the threshold of a computer-generated animation boom. “And, if we want to encash this boom, we must concentrate on high quality and timely delivery of products demanded by the entertainment industry throughout the world,” says Mr Rajesh Turakhia, Chief Executive Officer of the Mumbai-based Maya Entertainment Ltd.

India is being increasingly looked upon as a major animation hub by business houses in the world. It is, perhaps, the only country in Asia which can fulfil the growing demand for animation in the world. “We enjoy several advantages over many countries,” points out Mr Turakhia. “We speak the same language as the West i.e. English and we can produce a programme at less than half the cost it would take to produce it in the West; and above all, we have a similar sense of humour: we laugh at the same jokes cracked by people in the West. People in countries like Japan, Korea, the Philippines and China have trouble appreciating the western jokes...”

India is at present generating animation-related business worth $500 million every year. This is expected to grow to $12 billion by 2007-08. Mr Turakhia says that the international market in animation is expected to grow to $70 billion shortly. “One-third of this business is going to come to Asia, of which half must be attracted by India. For this, India will have produce sufficient manpower trained in animation techniques.”

Maya Entertainment Ltd (MEL), which is a leading computer animation and visual effects studio for film and television in India, is running 31 centres across the country to train young graduates in the techniques of animation. “So far, we have trained 3,000 persons. Another 3,500 are now on our rolls. The business is growing so fast that there is always a shortage of trained manpower.”

MEL was launched in 1996 by Ketan Mehta, the internationally acclaimed producer-director currently directing ‘The Rising’ and recipient of several national and international awards for his innovative and popular films like ‘Bhavani Bhavai’, ‘Holi’, ‘Mirch Masala’, ‘Maya Memsaab’, ‘Sardar’ etc. and Deepa Sahi, the much-admired film actress who has acted in artistic and popular films like ‘Tamas’, ‘Maya Memsaab’ and ‘Hum’.Top

   
Market update

by Lalit Batra

Easing oil prices lift Sensex

The easing of global crude oil prices led to a gain of 1 per cent in the indices last week. While Sensex gained 52 points at 5117, Nifty gained 18 points at 1609. The crude oil prices, which after nudging near the $50 per barrel mark last week, started to recede consistently and are now below $43 per barrel on the back of the resumption of supplies from Iraq. Value buying at lower levels and a smooth rollover of the derivatives positions also aided market momentum. The big event last week was the smooth passage of the finance Bill. The Finance Minister added two more concessions to his list, by deferring the tax on NRI and NRE deposits and raising the tax-free income limit from Rs 1 lakh to Rs 1.11 lakh.

The near-term outlook remains clouded by concerns. Oil prices at $43 per barrel are still very high. Oil is a key input in a host of industries and the price has a direct bearing on the cost of production. Inflation (7.94 per cent), if not controlled, will put an upward pressure on interest rates, though the RBI has provided broad hints of the continuance of a softer interest rate regime in the near-term. Long-term investors should stay invested.

TCS

Tata Consultancy Services (TCS), the largest software services exporter from Asia, and one of the most keenly awaited issues, got listed this week. The stock got listed at Rs 1050, a premium of 23 per cent to the IPO. After listing, the stock drifted lower on selling pressure and closed the week at Rs 962.5.

At the closing price, TCS stock trades at 27 times last year’s earning. This is much lower than Infosys, which discounts its earning by 33 times. This may be due to lower profitability of TCS vis-a-vis Infosys. This gap, we believe, should get abridged in next six to nine months. This is due to the fact that TCS has witnessed a strong revenue growth in the past few years and investors expect this to continue, as the company grows much larger in size going forward. Another positive that could propel stock would be addition of the stock in key indices such as Sensex and Nifty. Investors with a two-year horizon can buy TCS at the current market price (Rs 962.50) for decent gains.

ITC

ITC, the cigarette giant, has shown strong volume growth (11 per cent) in the first quarter, which is among the highest in the previous 10 quarters. Besides, it has made an entry into bakery and other fast moving consumer goods (FMCG) product lines (such as soaps and detergents), which will benefit from its strengths in distribution. Meanwhile, almost all of ITC’s earlier diversifications are paying off — the hotels, paper and the agri-product ventures.Top

   
Tax advice

by S.C. Vasudeva

Tuition teacher’s tax

Q. My son teaches tuitions to students at home in batches. His gross total income is Rs 3 lakh approximately. He pays Rs 48,000 salary and Rs 36,000 as rent for rooms. Please clarify the income-tax payable.

— Lala Ram Goel

A. The tax payable by your son for assessment year 2004-05 is computed as under: -

Amount (Rs)

Gross income 3,00,000

Less: expenditure 84,000

Net income 2,16,000

Tax payable 38,800

Capital gain

Q. I have sold units of US-64 for Rs 1 lakh. The cost of the units to me was Rs 1.5 lakh. Will I be entitled to adjust the loss against capital gain earned by me on sale of shares?

— Rahul Sharma

A. As per the provisions of Section 10(33) of the Act, income arising from the transfer of units of Units Scheme, 1964 is exempt from tax. Accordingly, the loss on transfer of units of US-64 cannot be adjusted against the capital gain earned by you on sale of shares.

Disease and tax

Q. Deduction from income is allowed at Rs 40,000 under Section 80DDB and according to Rule 11-DDB, sub-clause (ii) to (vi) of IT Rules, certain diseases are specified for which the deduction is allowed. I would therefore, like to know as to whether HCV-RNA PCR i.e. hepatitis-C (Positive) is covered in these diseases or not. It is a serious liver disease and the treatment is highly expensive.

—Sukhwinder Singh

A. As per Rule 11DD of the Income tax Rules, 1962 the eligible diseases or ailments for the purposes of Section 80DDB are as under: -

(i) Neurological diseases where the disability level has been certified to be of 40 per cent and above:-

Dementia; Dystonia musculorum deformans; Motor neuron disease; Ataxia; Chorea; Hemiballismus; Aphasia; Parkinsons Disease

(ii) Malignant Cancers;

(iii) Full-blown Acquired Immuno- Deficiency Syndrome (AIDS);

(iv) Chronic renal failure;

(v) Hematological disorders:

Hemophilia: Thalassaemia

Thus, Hepatitis-C (Positive) is not covered in the list of specified diseases.Top

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BRIEFLY

Dena Bank ED
Mumbai, August 29
M Vishwanathan Nair of Corporation Bank has been appointed the executive director of Dena Bank. Mr Nair, who worked with Corporation Bank for 31 years, was instrumental in the bank’s foray in the cash management services, a Dena Bank statement said yesterday. — PTI

Sail MoU
New Delhi, August 29
Steel Authority of India Ltd (SAIL) is likely to ink an agreement with an overseas coal mining company in a day or two for picking up a minority stake through the joint venture route in order to overcome the shortage of coal. — PTI

M&B Footwear
Mumbai, August 29
Delhi-based M & B Footwear Pvt Ltd, makers of Lee Copper and ID brand of shoes, is setting up a new manufacturing facility at Baddi, Himachal Pradesh, with an investment of over Rs 5 crore. The plant, which is expected to operational within a month, will produce over two-lakh pairs of footwear every month. — PTI

Canara Bank
Chandigarh, August 29
Canara Bank, Chandigarh circle, will open five more branches in the region during the current fiscal year. These will be located in Sector 20, Panchkula, Tarn Taran, Manesar, Amritsar and Kapurthala. A new branch of the bank was opened in Sector 44 yesterday. — TNS

Rakhi package
Indore, August 29
Bharat Sanchar Nigam Limited, Indore has announced a offer on Rakshabandhan. Any landline subscriber of BSNL can gift a landline connection to his sister without registration and installation charges till Janamashstami. — PTI 
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