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Reliance plans national gas grid
To shell out $14 billion for exploration and production projects

Mumbai/New Delhi, August 4
Reliance Industries Limited (RIL) today announced its plan to embark on a massive $12-14 billion investment programme in the next two to three years to carry out various exploration and production projects, apart from laying of 1,400-km east-west pipeline.

  • NELP VII auction

Posco threatens to exit Orissa
Bhubaneswar, August 4
Posco India, facing hurdles in acquiring land for its proposed 12 MTTP greenfield steel plant near Paradip in Orissa, has an 'alternative place and state' in mind, if it failed to set up the project at the present chosen site.

SEBI may shortlist LSE bidders soon
Chandigarh, August 4
Ludhiana Stock Exchange (LSE) has received overwhelming response to offer of divesting its member’s stake with bidders offering to buy 63.77 per cent stake against the offer of 51 per cent in the exchange. “The exchange has received expression of interest for buying 63.77 per cent stake so far from the public,” LSE, chairman, B B Tondon said here today.

Mbeki meets minister
Chandigarh, August 4
Minister of state for industry Dr Ashwani Kumar met President Mbeki of South Africa this afternoon and discussed matters of bilateral importance. Dr Kumar said South Africa had a special place in the hearts of Indians because of a shared past and common future.

Former Miss Universe Sushmita Sen poses at the launch of a P&G product in New Delhi
Former Miss Universe Sushmita Sen poses at the launch of a P&G product in New Delhi on Saturday. US-based FMCG firm Proctor and Gamble (P&G) announced its foray into the Rs 2,100-crore skincare market in India with the launch of a range of products, including an anti-ageing cream. The skincare market in India has been growing at 16 per cent annually. — A Tribune photograph


US-based Ford Motor Co said on Saturday that it was recalling as many as 3.6 million vehicles because a switch that deactivates the speed control can overheat, smoke or burn.
US-based Ford Motor Co said on Saturday that it was recalling as many as 3.6 million vehicles because a switch that deactivates the speed control can overheat, smoke or burn. The vehicles being recalled are F-Series and Ranger pickup trucks, Explorer, Bronco and Mountaineer SUVs, Econoline vans and some Crown Victoria, Town Car, Grand Marquis, Capri, Mark VII and Taurus Sho cars. — AFP photo


 

Aviation Notes
Crew training schools mushroom

As there is awakening in the civil aviation sector, many cabin crew training schools have sprung up in the country. Most of them are in metropolitan cities.

Investor Guidance
Specific form available to rectify PAN errors

Q: I have my PAN card, however, my name is mis-spelt therein and my date of birth is also wrong. What should I do? — Satindar

Video
Tatas plug Corus coal shortfall.
(56k)

 

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Reliance plans national gas grid
To shell out $14 billion for exploration and production projects
Tribune News Service and PTI

Mumbai/New Delhi, August 4
Reliance Industries Limited (RIL) today announced its plan to embark on a massive $12-14 billion investment programme in the next two to three years to carry out various exploration and production projects, apart from laying of 1,400-km east-west pipeline.

“We will invest around $12-14 billion in the next two to three years. This will go in areas like E&P, laying of pipeline and other works,” RIL president (development & production) Subhash C. Varma said, adding: “The investment also includes some of our activities overseas.”

He said laying of the 1,400-km east-west pipeline would cost around $3 billion. “We also plan to create national gas grid,” he informed.

Of the total proposed investment, the company intends to invest Rs 23,000 crore in the next one to two years in various oil and gas development projects.

Stating that the company plans to carry out extensive seismic activities in all major basins, Varma said it plans to drill over 100 wells in the next three to four years.

He added that RIL would also be participating in the seventh round of auctions of oil and gas blocks under the NELP-VII, which is expected to start in November this year.

NELP VII auction

Even as Reliance Industries is currently negotiating with government officials a price formula for the sale of gas from a block awarded under a previous auction, India has deferred until November its next auction of oil and gas blocks due to a shortage of rigs and a dispute over gas pricing, the country's upstream regulator has said. It had planned to auction about 80 blocks this month.

“Rig shortage has delayed the NELP-VII auction. The Director General of Hydrocarbons (DGH) recently told the petroleum ministry that the situation would improve in a year and a half. We are thus aiming to launch the auction by October or November, in time to meet the new rigs expected to be commissioned in 2009,” a senior official in the petroleum ministry said.

Demand for rigs, drilling equipment and services has risen due to a surge in global oil prices. The situation is expected to ease in 2009 with the commissioning of new rigs.

The formula will apply to all future gas producers, and is therefore eagerly awaited by potential bidders.

The government is likely to approve by next weekend a price for natural gas to be produced by Reliance Industries from KG block starting with July 2008.

The Prime Minister's Office has asked Petroleum Ministry to decide on the issue, incorporating the recommendations of a Committee of Secretaries, headed by Cabinet Secretary K M Chandrasekhar, that went into the price formula proposed by the Mukesh Ambani firm and the opposition from power and fertiliser sectors.

Ministries of fertiliser and power and Mukesh's younger brother Anil had opposed RIL's price of up to $4.58 per million British thermal unit for gas from KG-D6 and wanted government regulation so as to keep input cost of power and fertilizer plants down.

The fertiliser and power ministries, which together consume around 70 per cent of the gas, said they should get supplies at a subsidised rate of less than $3 per mBtu. These companies get gas at an administered price from ONGC and Oil India or use expensive naphtha or fuel oil.

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Posco threatens to exit Orissa

Bhubaneswar, August 4
Posco India, facing hurdles in acquiring land for its proposed 12 MTTP greenfield steel plant near Paradip in Orissa, has an 'alternative place and state' in mind, if it failed to set up the project at the present chosen site.

“We have given a thought on this issue in the wake of opposition from local people near Paradip. But intensity of the opposition to the company's steel project has come down with time,” Posco India CMD Soung-sik Cho told a TV news channel here.

Cho was answering a question as to whether the company would quit Orissa if opposition to its project continued for a long time. ”Things are moving in a positive direction. We hope to start earth work at the proposed plant site in October,” he exuded confidence.

He said the plant site near Paradip was selected keeping an eye on the minimum displacement of human habitation.

"We will go beyond the Orissa government's resettlement and rehabilitation policy which is said to be the best in India," Cho said, adding the life of local people would certainly change in a positive manner after the plant was commissioned in Orissa.

"Look how the people of Pohang in South Korea have prospered only for the Posco's steel plant there. The people of Kujang will also experience the same prosperity after the steel plant came up in their area," he said.

He said the company would certainly offer an acceptable rehabilitation package for the displaced people.

On the raging issues relating to iron ore mines at Khandadhar in Sundargarh district where local MP and senior BJP leader Jual Oram had launched an agitation opposing the South Korean company, Cho said the company would work in the area without disturbing the famous waterfall or any religious places.— PTI

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SEBI may shortlist LSE bidders soon

Chandigarh, August 4
Ludhiana Stock Exchange (LSE) has received overwhelming response to offer of divesting its member’s stake with bidders offering to buy 63.77 per cent stake against the offer of 51 per cent in the exchange.

“The exchange has received expression of interest for buying 63.77 per cent stake so far from the public,” LSE, chairman, B B Tondon said here today.

The exchange has sent the proposals of bidders, who can take up to 5 per cent stake in companies, to the SEBI for its approval.

“We expect that the SEBI will approve the names of some of the bidders for acquiring stake in the exchange by next week,” an LSE official said.

According to demutualisation process of the regional stock exchanges in the country, the LSE has to divest its members’ 51 per cent stake to the public as per the Securities Contract (Regulations) Act, 1956 by September 14. — PTI

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Mbeki meets minister
Tribune News Service

Chandigarh, August 4
Minister of state for industry Dr Ashwani Kumar met President Mbeki of South Africa this afternoon and discussed matters of bilateral importance. Dr Kumar said South Africa had a special place in the hearts of Indians because of a shared past and common future.

The relationship, he said, was cemented by a firm commitment to freedom and social justice. Kumar added that the time had come to realise the full economic potential of India -South Africa cooperation in pursuit of inclusive economic growth.

Later, addressing the ‘India Calling - 2007’ conference, organised by the Indian Merchants’ Chamber in Johannesburg, President Mbeki endorsed Dr Kumar’s perceptions about the need for inclusive economic growth and remedying injustices of the past.

The emergence of Indian businesses as global players, he said, was an important development in addressing the fracture between the wealthy north and marginalised south.

The President urged the Indian business delegation to work with South African counterparts to address the challenges of poverty, inequality and skill development.

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Aviation Notes
Crew training schools mushroom
by K.R. Wadhwaney

As there is awakening in the civil aviation sector, many cabin crew training schools have sprung up in the country. Most of them are in metropolitan cities.

Many renowned hostesses and pursers, with experience of working in different airlines, have joined hands to impart training. Expenses are heavy but parents willingly pay because salaries/perks are lucrative. According to managements, the response is encouraging and production of hostesses has increased manifold.

The job of a hostess though glamourous is a tough assignment. While a few types of passengers are demanding, others are difficult to manage.

Youngsters are given training on varied subjects. They receive lessons on catering, airborne procedures, documentation, aircraft pressurisation and ventilation. They are also taught first aid procedures.

According to retired hostesses, looks, educational qualifications and command over languages of English and Hindi are important, but more vital is temperament. No matter what the situation exists, the hostess is taught to wear pleasing looks.

The new schools are laying a lot of importance on ‘quality production’. Aware that the selection procedure for recruiting hostess is very tough, they are combining practical training with theory.

As against 6,000 hostesses and pursers in 2004-05, there are now more than 10,000. Despite merger, Air India is still endeavouring to further improve the quality of cabin crew.

Whatever the boom in aviation sector, the market is expected to consolidate within the next two to three years as there is scope for only the ‘financially fit to survive in razor-sharp competition’. The weaker players will either fold or join bigger leagues. According to aviation analysts, there is a scope for only four or five private airlines to sustain competition.

The data shows that most of the carriers are losing money because controlling overhead expenses on fuel, maintenance, salaries and perks is not possible.

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Investor Guidance
Specific form available to rectify PAN errors
by A.N. Shanbhag

Q: I have my PAN card, however, my name is mis-spelt therein and my date of birth is also wrong. What should I do?
— Satindar

A: There is a specific form available for precisely such cases. This form has to be submitted specifying the corrections and attaching a copy of your PAN as is issued to you.

Accommodation

Q: Recently, I read an article that stated that the perquisite value of employer provided accommodation has been reduced from 20 per cent to 15. However, the same did not state the source of information. Can you please clarify the rule or provision where this amendment can be found? I have been unable to locate it.
— Upendra

A: This provision is contained in Section 17(2)(ii) of the Income Tax Act. Please refer the latest version as this amendment was inserted by the Finance Act, 2007.

Return with interest

Q: Since I was travelling and some of my papers were not in order, I could not manage to file my tax return in time this year. I am a salaried person and my salary is my major source of income. The only other minor income would be on account of the savings bank interest. Now what are my options and what would be the best course of action?
— Manjit

A: You should make arrangements to file your tax return as soon as possible. If you file your return before March 31, 2008, no penalty would be applicable. Also, interest @1 per cent per month will be payable on the difference between the final tax due and the tax already deducted.

Tax on ESOPs

Q: Recently there has been a change in the taxation of employee stock options (ESOPs). Can you elaborate on the same? I have been awarded some options and desire to know the optimal tax treatment thereof.
— Ravi Raja

A: Budget 2007 has brought ESOPs under the ambit of Fringe Benefit Tax (FBT). Earlier, FBT was not applicable on such ESOPs. However, from April, 2007, any ESOP awarded to the employee will be first taxable in the hands of the employer as FBT. The tax will be applicable @33.99 per cent on the difference between the price on the date of vesting and the exercise price. This tax, though payable by the employer, can be passed on to the employee. There is little you can do to avoid this tax. Upon sale of such ESOP shares, the difference between the sale price and the exercise price would be taxed as capital gain.

Two properties

Q: I have two houses, both purchased using housing finance. However, my company HR payroll department has not considered the interest paid on the second property for calculation of TDS. They have just considered an amount of Rs 1,50,000 on account of interest on the first property. That being said, interest on the first property itself is more than Rs 1,50,000. However, I am given to understand that Rs 1,50,000 is the maximum limit. That's fine. But what about the interest on the second property? I haven't got any firm answers from them and was hoping you could throw some light on this issue.
— R. J.

A: The deduction on interest paid on one property is limited to an amount of Rs 1,50,000. The second property is taxable (even if not rented out, the annual value is taken on a notional basis) and consequently, the entire amount of interest is tax deductible. However, the same cannot be considered for the purposes of arriving at the TDS amount on salary. Therefore, the HR department of your company is correct and is just following the law. You will have to individually claim the interest deduction on the second property through your tax return.

FEMA and IT Act

Q: We are NRIs living in the US. When I was in India two weeks back, I initiated the process of opening demat accounts for my wife and me. I would like to retain two joint accounts for future transactions - one non-PIN (to apply to IPOs) and one PIN (for buying shares in the market). These can be linked to either NRO account or NRE account. That means I need to choose one each from; (i) Non-PIN linked to NRO and Non-PIN linked to NRE, and (ii) PIN linked to NRO and PIN linked to NRE. NRE account of course allows repatribility, but that is not important for us. What would be of interest to us is tax implication. Does anyone offer better tax shelter in the event of capital gain — short term and long-term, or both?
— Ramesh

A: PIN, Non PIN, NRO, NRE etc. are terms that are envisaged by FEMA (Foreign Exchange Management Act), which essentially deals with permissions and regulations of foreign inflow and outflow of NRIs. In other words, repatriability issues upon purchase and sale of assets, including shares. However, FEMA doesn't have anything to do with tax incidence.

Tax is decided as per the provisions of the Income Tax Act. (ITA). Shares sold after 12 months are capital gain tax free, whereas shares sold earlier are subject to a 10 per cent tax. The tax incidence is decided upon the first instance at the transaction level, where you credit the monies (NRE/NRO) doesn't matter.

So as far as your query is concerned, structure the accounts as per your convenience, it wouldn't matter tax wise.

The authors may be contacted at wonderlandconsultants@yahoo.com

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BRIEFLY

SBI, Visa pact
Mumbai, August 4
The State Bank of India today said it plans to increase its ATM network by about 3.5 times to 25,000 over the next three years. In its resolve to build a ‘cashless society’, the SBI, in association with global payment gateway Visa, has introduced SBI Gold International Debit Card for the higher segment. The card is available free of cost to all saving account holders of the bank with an average quarterly balance of Rs 50,000. — PTI

IFCI partner
New Delhi, August 4
IFCI today said it will invite expressions of interest (EoI) for inducting a strategic partner from August 13. It is selling a 26 per cent stake as part of its plan to sell assets to improve the financial performance. Ernst & Young was appointed as advisor for the stake sale. The last date for submission of EoI is September 14. — PTI 

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