SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

B U S I N E S S

Forex reserves may fund infrastructure projects
Rs 100-cr fund to help states also on the cards
New Delhi, July 21
Finance minister P. Chidambaram shakes hands with deputy chairman of Planning Commission Montek Singh Ahluwalia at a conference of chief secretaries, in New Delhi on Saturday. With a whopping $475 billion required over the next five years for infrastructure development in the country, the Centre is toying with the idea of using a part of its foreign exchange (forex) reserves to fund projects, finance minister P Chidambaram said here today.

Finance minister P. Chidambaram shakes hands with deputy chairman of Planning Commission Montek Singh Ahluwalia at a conference of chief secretaries, in New Delhi on Saturday. — PTI photo

LSE gets EoI for 25 pc stake
Chandigarh, July 21
The Ludhiana Stock Exchange (LSE) today said it has received expression of interest (EoI) from nine investors for buying 25 per cent stake, as part of demutualisation process of the regional bourse.


EARLIER STORIES

 

Intel-HCL launch classmate PCs
Jaipur, July 21
The world’s largest chip maker Intel and leading computer manufacturer HCL Infosystems today announced the launch of classmate PCs .

ICICI Bank profit up 25 per cent
Mumbai, July 21
ICICI Bank today said its profit after tax for the first quarter of the current financial year has increased by 25 per cent to touch Rs 775 crore and the total income stood at Rs 9,281.42 crore.

Aviation Notes
DG’s extension irks DGCA officials
There is a lot of disappointment and dejection in the corridors of Directorate-General of Civil Aviation. The reason: extension of six months to Director-General Kanu Gohain after reaching superannuation.

Investor Guidance
No entry load on dividend reinvestment option in MFs

Q: Can you clarify whether in the case of mutual funds, dividend reinvestment option attracts any entry load (say 2.25 pc) on the dividend being reinvested? Does the policy differ from fund to fund?


Top



 

 

 

Forex reserves may fund infrastructure projects
Rs 100-cr fund to help states also on the cards
Tribune News Service

New Delhi, July 21
With a whopping $475 billion required over the next five years for infrastructure development in the country, the Centre is toying with the idea of using a part of its foreign exchange (forex) reserves to fund projects, finance minister P Chidambaram said here today.

The government is in discussion with the Reserve Bank of India to use some portion of the foreign exchange reserves, estimated at around $220 billion, for infrastructure, Chidambaram stated at a conference of chief secretaries on public-private partnership (PPP).

The finance minister also disclosed plans for the proposed Rs 100-crore India Infrastructure Project Development Fund (IIPDF) aimed at helping the states in preparatory work of projects with PPP.

He said up to 75 per cent of the expenses of projects under PPP will be financed by it. The IIPDF, which will be a revolving fund, will be used to assist states and will get replenished not only from successful bid projects but also through budgetary support.

Stating that the government will not be able to meet the growing funding need on its own for infrastructure, he said the country will need massive private investment.

In this context, he pointed out that though finances were available with a large number of private funds looking at India with interest, there were not enough infrastructure projects on the shelf in states.

He, however, said the pace of infrastructure projects had gathered momentum in 2006-07. As many as 12 states have agreed to sign MoUs with Asian Development Bank for providing technical assistance to PPP projects. Two such MoUs have already been signed, he added.

Addressing a press conference after the conclusion of the meeting, deputy chairperson of the Planning Commission Montek Singh Ahluwalia said there was growing recognition among the states that PPP is inevitable to spruce up shaky infrastructure.

He said the states have been asked to send report on the ongoing infrastructural projects as well as what new projects they propose to take up during the 11th five-year Plan period.

Top

 

LSE gets EoI for 25 pc stake

Chandigarh, July 21
The Ludhiana Stock Exchange (LSE) today said it has received expression of interest (EoI) from nine investors for buying 25 per cent stake, as part of demutualisation process of the regional bourse.

"We have received expression of interest from nine investors, including one company, for about 25 per cent stake in the stock exchange," LSE chairman B.B. Tondon said.

LSE has forwarded the cases of the interested parties to SEBI for its approval, he said.

Tondon said the exchange received a number of proposals but it shortlisted nine investors after due diligence.

Senior officials of the exchange hoped that the LSE would be able to complete the demutualisation process by August.

LSE, one of the regional stock exchanges in the country, has to divest 51 per cent stake as per the Securities Contract (Regulations) Act, 1956 by September 14, 2007. — PTI

Top

 

Intel-HCL launch classmate PCs

Jaipur, July 21
The world’s largest chip maker Intel and leading computer manufacturer HCL Infosystems today announced the launch of classmate PCs .

The mobile PC is priced in the sub Rs 18,000 range and will be available in the market for schools starting August, HCL Infosystems executive vice-president Rajendra Kumar said.

“It is priced in the sub Rs 18,000 range but also includes the cost of installing supporting connectivity infrastructure, teachers’ training and customised integrated learning solutions through our tie-up with content developers and education service provider. Later, the cost will go down further,” he said.

Classmate PC is an educational tool developed by Intel to aid students in their classroom learning. It is powered by Intel Processor 900 Mhz and comes with WiFi and ethernet connectivity. It has a 7-inch LCD screen, 215 MB and 512 MB RAM with one GB and two GB flash memory.

Classmate PCs will be retailed through schools and HCL Infosystems expects to deploy 3,000-5,000 such PCs over the next one year. — PTI

Top

 

ICICI Bank profit up 25 per cent
Tribune News Service

Mumbai, July 21
ICICI Bank today said its profit after tax for the first quarter of the current financial year has increased by 25 per cent to touch Rs 775 crore and the total income stood at Rs 9,281.42 crore. Fee income shot up by 35 per cent to Rs 1,428 crore, while net interest income rose by 16 per cent to Rs 1,714 crore from Rs 1,475 crore.

Total advances went up by 35 per cent to Rs 1,98,277 crore as against Rs 1,47,184 crore in the corresponding quarter of the last fiscal.

Top

 

Aviation Notes
DG’s extension irks DGCA officials
by K.R. Wadhwaney

There is a lot of disappointment and dejection in the corridors of Directorate-General of Civil Aviation (DGCA). The reason: extension of six months to Director-General Kanu Gohain after reaching superannuation.

The senior staff, particularly the affected two joint DGs, hold no personal grudge against Gohain. But they are rightly upset at non-adherence of superannuation rules. If the minister or the concerned authorities continue to grant extensions to their ‘favourites’, there will be no promotions and change of baton leading to confusion and chaos, said DGCA officials, adding: “Why then maintain merit and seniority list of next-in-line incumbents?”

The consensus among DGCA and other aviation officials in Air India and Indian (Airlines) is that the Prime Minister’s Office should not allow such extensions which have demoralising effect on the functioning of the officials.

Paucity of pilots

Red tapism is instrumental for paucity of pilots in the country. Many popular flying training institutions have been closed down. While one at Delhi has been shut down because of its security-risk location, many others have been lying in disuse because of lack of competent instructors and unavailability of government grant.

The Indira Gandhi Uran Academy at Rae Bareli, for example, has a lot of potential to produce scores of pilots. It has facilities to produce double or triple quantums of pilots it is currently producing. This is again because it is a strong hub of politics instead of the pilot training centre. There is also acute shortage of training aircraft.

According to many senior pilots and DGCA officials, majority of pilots returning from America lack in general knowledge and technical flying knowhow because they have managed licences in 5-6 months instead of undergoing the minimum stipulated training of 18 months. Luckily, there have not been many incidents because ‘machines’ they are handling are new and sturdy. The experts are of the firm belief that persons are safe in modern aircraft than in their homes.

Flight to US

Air India’s much-delayed non-stop flight between Delhi and New York and back will start functioning from August 1. It is an occasion to celebrate. The traffic on this route is large and the flight can be very popular, if handled carefully.

The flight has, however, posed a problem to the airline, which is short of trained and experienced pilots. The non-stop 11-hour flight would consist of two sets of cockpit and cabin crews. One, in command from Delhi, would fly for five and a half hours before another set of crew takes over. The first set of crew would return about half-an-hour earlier to secure command because they are instrumental for landing also. The take-off and landing have got to be undertaken by one set of crew.

On return from New York to Delhi, the second crew will be first to undertake take-off and landing.

According to Air India officials, deployment of two sets of crews may affect some important flights. But there is, however, no cause for panic.

Top

 

Investor Guidance
No entry load on dividend reinvestment option in MFs

by A.N. Shanbhag

Q: Can you clarify whether in the case of mutual funds, dividend reinvestment option attracts any entry load (say 2.25 pc) on the dividend being reinvested? Does the policy differ from fund to fund?

— Vinay Raje

A: Dividend reinvestment does not attract an entry load. Only a fresh investment or a transfer (switch) attracts the entry load. This is true for all mutual funds.

PPF repayment

Q: My relative had a PPF a/c and had nominated his wife and son as nominees. He expired on 21.05.07. Unfortunately, his wife died on 15.06.07 before the application for repayment of PPF amount could be made. How do the provisions regarding the payment of the balance of PPF to the surviving nominee apply?

— Sharad Hatekar

A: The PPF Act and scheme 06-07 states that if a subscriber dies, the nominee(s) may make an application in form G to the Accounts Officer together with proof of death of the subscriber and on receipt of such application all amounts standing to the credit of the subscriber after making adjustments, if any, in respect of interest on loan taken by the subscriber shall be repaid by the Accounts Officer itself to the nominee(s). If any nominee is dead, the surviving nominee or nominees should in addition to the proof of death of the subscriber, also furnish proof of the death of the diseased nominee.

The Act also states that the nominee does not automatically become the owner of the fund. Nomination is a device for collecting the funds smoothly and handing these over to the trustees appointed by the will of the deceased person for distribution as directed by the will.

The Accounts Officer shall pay to the surviving nominee the entire balance in the PPF account of the subscriber.

However, if there were more than 2 nominees with defined percentages of their share and if one of them dies, the situation could give rise to some confusion.

For instance, if there are three nominees A, B and C having a share of 50%, 30% and 20% respectively, and A has expired, will B and C get 55% and 45% or 60% and 40% or any other ratio? Consequently, different accounts offices may follow different methods of distribution.

Capital gains

Q: I am given to understand that capital gains earned on sale of property can be saved by investing in another property. But recently I also read that this is applicable to residential properties only. Kindly let me know whether the same rule applies in case of individual rental property also.

— M K Sharma

A: If you are an individual renting a property residential in nature, then yes the same rule applies. On the other hand, if you are referring to selling of tenancy rights, then you will have to take shelter under Sec. 54F. The rules are largely the same, however, in the case of Sec. 54F, the net sale proceeds have to be invested in another property whereas under Sec. 54 (that was discussed in the article), only the capital gains have to be invested. Alternatively, you may invest the capital gains in NHAI or REC bonds to save tax for both cases.

Investment for HUF

Q: I would like to know whether NSC of post office (including interest thereon), Bank deposits for 5 years and PPF are eligible investment under Section 80C deduction for HUF?

Are there any other types of investments eligible for HUF?

— Niraj

A: RBI Notification GSR291(E) dt 13.5.05 has discontinued opening of the accounts on behalf of HUF, AOP and BOI with immediate effect. Such accounts opened by mistake shall be treated as void ab initio. As and when the error comes to light, the account shall be closed and the amount refunded to the depositor without any interest. The existing accounts can continue up to their maturity without the privilege of post-maturity continuation. SO289 (E) dt 13.05.05 has similarly prohibited HUFs from buying NSCs.

Notified Bank term deposits of 5 years are eligible for HUFs. Other avenues are life insurance contributions, Equity-linked savings schemes of MFs, Unit-linked Insurance Plans, etc.

Tax on capital gains

Q: Regarding Fixed Maturity Plans (FMPs) of mutual funds, I want to know whether the capital gain is taxed at source or not?

— Udit

A: No, in case of all schemes of all mutual funds, whether equity-based or non-equity-based, the capital gain is not taxed at source for Resident investors. However, for NRIs, the long or short-term capital gain on non-equity based schemes and the short-term capital gain on equity-based schemes is taxed at source. Of course, the long-term capital gain on equity based schemes is tax-free for Residents and NRIs alike.

Gift tax

Q: I am an NRI living in the US. The person I am sending money to is my fiancee to whom I am engaged to be married. I want to ask if she will be charged any sort of a tax on it. Is there some sort of a limit beyond which if money is transferred it will be taxed?

— S Kaluri

A: Any sum of money in excess of Rs 50,000 received from a non-relative is to be taxed as income except if it is in contemplation of death, under a will or on the occasion of marriage. If the residential status of your fiancee is Indian Resident then till you do actually get married, you do not become a spouse/relative of the recipient. However, there are no time limits declared for giving gifts on the “occasion of marriage”. Therefore, if your marriage is round the corner, then your fiancee may claim the gift as tax exempt on account of it being on the occasion of marriage. However, the wedding has to be within a reasonable period of time, else the ITO may object to the exemption claimed.

The authors may be contacted at wonderlandconsultants@yahoo.com

Top

 



HOME PAGE | Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Opinions |
| Business | Sports | World | Mailbag | Chandigarh | Ludhiana | Delhi |
| Calendar | Weather | Archive | Subscribe | Suggestion | E-mail |