Nath defends SEZ concept, hopeful on WTO talks
US firms to park funds in Karnataka
Free medicines for poor people
Nath defends SEZ concept, hopeful on WTO talks
Singapore, September 16
“IMF should get its facts right. They should go to the field and not sit in Washington and criticise,” India’s Commerce Minister Kamal Nath said, strongly reacting to the IMF Chief Economist’s criticism on Thursday here at the ongoing annual World Bank-IMF meeting.
Special Economic Zones are a success, said Mr Nath, a strong advocate of SEZs for boosting exports and manufacturing in the booming Indian economy that has been clocking over 8 per cent economic growth making the success story of India and China as focus of discussion at the annual meeting.
Detractors of Special Economic Zones, a policy initiative taken last year, have been critical of the concept saying they would be revenue rip-offs and feared that ultimately industrial units elsewhere in the country would shift to SEZs to take advantage of the tax holiday given to them.
Mr Nath said there was no justification in saying that there would be revenue loss as it was notional. “When there is no levy how can you say it could lead to revenue loss,” he added.
The Government has already approved over 160 SEZs in the country and the Board of Approval is scheduled to meet in the third week of this month to clear 225 pending applications for the zones in the country.
He cited the example of Nokia SEZ in Chennai and said one should go and see the kind of economic activity SEZs were generating. Eight to 10 SEZs have already been established in a short period of time in the country and the results were there for everyone to see.
The Special Economic Zones concept led to a tug of war between Commerce and Finance Ministries on whether SEZs cost the Government exchequer, resulting in an Empowered Group of Ministers headed by Defence Minister Pranab Mukherjee stepping in to resolve the differences.
Mr Rajan had on Thursday asked India to “very carefully” look at the much-touted special economic zones, saying the give-aways and tax sops to the zones could divert industrial activity from the rest of the country.
“Overall, it (tax sops for SEZs) becomes yet another give-away which the government cannot afford,” the IMF Chief Economist had said.
India also set at rest the speculation that it preferred regional and bilateral trade agreements in the face of the stalled WTO talks, saying there can never be “trade-offs” between regional and multilateral pacts agreements, which would exist side-by-side.
“It cannot be either, or. There are no contradictions,” Mr Nath told a seminar at the annual World Bank-IMF meeting here.
The ’90s was a decade of globalisation and ever since WTO came into being in 1995, there has been a rise in regional trade agreements like NAFTA and the European Union.
He said nearly 50 per cent of the world trade was through regional and bilateral trade agreements but this did not mean multilateral trading system has lost its relevance.
The global economic architecture was undergoing a change as certain trade could be done only through bilateral agreements, while at the same time rule-based multilateral trading system was equally important.
There are as many as 300 trade agreements in various stages of agreements, which more than double the member-countries of WTO, Mr Nath said emphasising it was in the interest of both developed and developing countries that the stalled Doha Development Round was put back on track at the earliest.
He, however, said it was not correct to say that the stalled WTO talks have failed. “Doha is on. The Doha Round was on track. There may be some setbacks but I am confident that it would be completed... Let us not be obsessed (about) when it is completed. Let us be obsessed with its content and completion,” he added. — PTI
India’s rapid economic growth is at the risk of tripping if the country does not curb corruption and enforce rule of law, the World Bank has warned in a report.
The world’s second most populous nation ranks 47th in a list of 213 countries measured for their quality of governance in a new World Bank report — Governance Matters 2006: Worldwide Governance Indicators.
World Bank Global Governance Director Daniel Kaufmann, who termed the ranking as “not in the right zone,” said that the country must “pay priority to these issues” to maintain its rapid GDP growth.
Neighbouring China, with whom India is often compared to, ranked 31 in the list of the corrupt nations and prompted Kaufmann to warn that “a country could get away in the short term, and that short term could be 10 years.”
In political stability, India was ranked 22, voice and accountability (56).
As regards regulatory quality, it scored 44th percentile.
Riding on big investments and likely increase in agriculture output, Indian economy may grow at an average 9 per cent in the next five years, Planning Commission Deputy Chairman Montek Singh Ahluwalia said today.
“There has been big investments in private corporates...
It’s in response to entrepreneurial (skills) unleashed by reforms),” he said at a seminar.
The country is seeking to double agriculture growth in the next five years, he said at the seminar, held on the sidelines of the World Bank and IMF meetings here.
Agriculture growth bounced back to 3.9 per cent during 2005-06 from a meagre 0.7 per cent in 2004-05.
Last fiscal, Indian economy grew at 8.4 per cent.
The International Monetary Fund on Thursday had raised its projections for Indian economic growth to 8.3 per cent for 2006, against earlier forecast of 7.3 per cent.
US firms to park funds in Karnataka
Bangalore, September 16
Disclosing this here today, Minister for Major Industries Katta Subramanyam Naidu said the delegations from the US were the result of a number of presentations made by a high level delegation from the state, which had visited the US from August 31 to October 10. The delegation was led by Deputy Chief Minister B S Yediyurappa.
Discussing the projects, Mr Naidu said chip manufacturer Intel alone was planning to invest Rs 1,000 crore on software parks in Bangalore and Mysore in the next two years besides the $1 billion investment planned for India. The company planned to strengthen its research and development and invest in telecom and technology start-ups, besides its development centre in Bangalore, he said.
Similarly Nortel was set to establish a 35,000 square foot facility in the city, which would employ more than 100 highly skilled engineers by the end of this year. He said other companies who had evinced interest in starting up ventures in the state include ICICI Ventures, Tishman Speyer and TSI Ventures.
The Karnataka government had held presentations at the Rockefeller Centre in New York besides Baltimore and San Francisco.
The state government is also in the process of appointing ambassadors of industry abroad to help it in current investment drive, he added.
Free medicines for poor people
Chandigarh, September 16 This even as the large pharma companies are yet to make a decision on proposal given by the Union Ministry of Chemicals and Fertilisers, asking them to give at least 1 per cent of medicines manufactured by them to the BPL families. The ministry had asked the pharma sector to contribute for the BPL families, by creating a Public-Private Partnership. This was done after the industry had opposed the move to include over 354 medicines in the National List of Essential Medicines (NLEM), thus imposing a price control on them. The government is working to bring down the prices of drugs, following the directions of the SC.
Chandigarh, September 16
This even as the large pharma companies are yet to make a decision on proposal given by the Union Ministry of Chemicals and Fertilisers, asking them to give at least 1 per cent of medicines manufactured by them to the BPL families. The ministry had asked the pharma sector to contribute for the BPL families, by creating a Public-Private Partnership. This was done after the industry had opposed the move to include over 354 medicines in the National List of Essential Medicines (NLEM), thus imposing a price control on them.
The government is working to bring down the prices of drugs, following the directions of the SC.
by K.R. Wadhwaney
Judging from the infectious enthusiasm and friendliness at the recent road-shows in Delhi and Mumbai, Finnair is determined to make a strong debut on the Indian routes.
Come October, Finnair, flag carrier of Finland, will start three flights a week to Delhi. It will increase its operations to five early next year before initiating flights from Mumbai and Channai.
“Our homework suggests success as tour operators and travelling agents have shown interest in the Indian service”, said Finnair country manager Taina Tornstrom, adding: “India like China, Japan and Thailand, is a hugely rising power in aviation and tourism”.
According to Finnair officials, ‘packages’ for travelling to Finland and back have been meticulously prepared and advance response has been more than satisfactory. “We plan to carry about one million passengers on India and other Asian routes before this year ends”, said one Finnnair official.
Finland’s Civil Aviation Administration, Finaving, will sell Helsinki, where ‘flying Finn’ long distance champion Paavo Nurmi had lighted lamp for the 1952 Olympic Games. According to aviation analysts, Helsinki-Vantaa will be a convenient hub for travelling to other European destinations.
A senior Finnair official said that airline’s interest has grown in the Indian market on the basis of success achieved in ‘leisure flights’ to Goa in summer months.
“The fast rising traffic between Helsinki and several Asian countries offers us unique advantages to act as a bridge between Europe and India now and in the future”, said Finnair official.
Some other foreign carriers are also planning to start operations ex-India, particularly to Goa and back. Condor Airlines, Italy’s Eurofly and NOK Air (Thailand) are strong contestants to start operations.
A senior industrialist, who also operates an airline, has painted a gloomy picture about no-frills carriers operating on the domestic sectors. Rising fuel prices and high salaries and perks for cockpit and cabin crews are preventing most airlines to even meet the operating costs. He predicts that only a few fittest among more than a dozen airlines will survive while others will fold sooner than later. Aviation analysts feel that his observation is not far from wrong.
by A.N. Shanbhag
Q: What is the threshold limit for interest under senior citizen savings scheme and post office monthly income scheme, above which TDS is to be effected if declaration in form 15G or 15H is submitted or not submitted by the investor? Can one open more than one account at the same or at different accounting office/ branch of post office/ bank within overall limit of Rs 15 lakh under
A: 1. The threshold is Rs 5,000.
Q: I deposited Rs 4 lakh in MIS. I was withdrawing interest regularly.
A: Premature withdrawals are allowed after expiry of one year. Penalty of 3.5 pc (reduced from 5 pc by Notification GSR 758(E) dt 23.9.03) of deposit amount shall be deducted if withdrawals are effected within 3 years; no penalty thereafter, other than loss of the bonus. The above referred notification has modified this also. If such a withdrawal is made after one year, but before three years, 2 pc of the deposit will be deducted, else it will be 1 pc.
The notification does not specify whether the Rule is applicable even on old accounts. Good jurisprudence requires all modifications to be effected prospectively. Retrospective application of such Rules is an injustice to those who had invested under the regime of the old rules. A public interest litigation against the NSO is necessary to prevent officials from taking undue advantage of the fact that small investors like you are not in a position to take such actions. Hope, some NGO like Dignity Foundation takes up the matter.
Q: I invested through a broker and he maintains my Portfolio for the past 16 months; He used to send me monthly statement of account. Of late, he has not only stopped sending the monthly statements but does not respond to my emails. I am in a fix. I do not know how to proceed. His phones are either busy or out of order!! How to know the real state of affairs? Any suggestions?
A: You must be having the details of your demat account wherein your shares are credited. Check in his statement which DP the shares were in and then correspond with the DP directly.
Q: I am a 44 year old woman. My husband is working in a bank. In the banks records, I am dependent on him. I am primarily a housewife. However, over a period of last 6-7 years, I have earned some money (not regular) on my own by engaging in some irregular works like taking tuitions, conducting cooking classes and yoga classes at different times. The amount earned varies from Rs 30,000 - Rs 40,000 per year. It was my own effort on account of my professional competence. At times, I have also received small amounts as gift from my father. I have affidavit to this effect from my father. A good part of these earnings was invested by me in KVP and Mutual Funds. I also have a PAN. However, I have never filed IT return as my income was never above the threshold exemption limit.
A: Your understanding is perfect. For clarity, we reiterate that what ‘some persons’ have told you is entirely wrong. You can have some earning of your own and still be dependent. Only the income earned by you from the corpus gifted by your husband will be clubbed. Another clubbing provision is applicable in case you receive a salary from your husband on an assignment for which you do not have any expertise and specialised knowledge. But the money actually earned by you is not taxable in his hands.