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Shed chalta hai attitude, PM tells textile industry
New Delhi, September 1
Prime Minister Manmohan Singh today promised government’s full support to the textile industry to enable it emerge a
world leader.

Prime Minister Manmohan Singh adjusts his garland at the concluding session of TexSummit 2007 in New Delhi on Saturday. — PTI photo
Prime Minister Manmohan Singh adjusts his garland at the concluding session of TexSummit 2007 in New Delhi on Saturday.

Flame may spark lawsuit
Bajaj alleges patent violation by TVS
New Delhi, September 1
Country's second largest two-wheeler manufacturer, Bajaj Auto Ltd is planning to sue south Indian rival TVS Motor Co for "infringing" upon intellectual property rights of its patented digital twin-spark ignition (DTSi) technology.

PSB director Josh resigns
New Delhi, September 1
Harcharan Singh Josh, one of the five directors of state-run Punjab and Sind Bank who rallied for the removal of the bank’s chairman, has resigned for reasons of perceived autocratic atmosphere.

LIC plans credit cards
Bhopal, September 1
Public sector insurance major Life Insurance Corporation of India (LIC) is all set to foray into the growing credit card market soon.

Aviation Notes
ATC shortage deepens as flights multiply
Increased flights, shortage of experienced air traffic controllers (ATCs), age-old rules and lax control of the Airports Authority of India (AAI) are the main factors for ‘near-miss’ incidents at the Indira Gandhi International Airport (IGIA).

Investor Guidance
NRIs need PINS account to dabble in scrips
Q: I am 30 years old and have so far lived in India. I have invested in shares, mutual funds, public provident fund (PPF) and life insurance policies. I also own an apartment. Now, I have been offered a job in the US and intend to relocate there. It seems that I would be based in US at least for the next decade, if not more.


Women in kimono dress walk through plastic umbrellas painted with flowers for an art exhibition, 100 umbrellas, at a Tokyo shopping mall on Saturday.
Women in kimono dress walk through plastic umbrellas painted with flowers for an art exhibition, 100 umbrellas, at a Tokyo shopping mall on Saturday. — AFP photo

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Shed chalta hai attitude, PM tells textile industry

New Delhi, September 1
Prime Minister Manmohan Singh today promised government’s full support to the textile industry to enable it emerge a world leader.

Dr Singh called upon the Ministries of Finance, Commerce and Industry, Textiles and National Manufacturing Competition Council (NMCC) to sit together with the industry to find solutions to the various problems faced by the textile sector.

Delivering valedictory address on the concluding day of the TexSummit-2007 here, Dr Singh urged the industry to shed chalta hai attitude in view of immense global challenges the industry has been facing since the dismantling of quota regime from 2005.

“There are immense challenges from South-East Asia, South Asia, China and other countries, we must not be afraid of the competition and we have to meet the challenges and there cannot be ‘chalta hai’ attitude,” he added.

The government and industry must join hands to meet the challenges.

Everything must be done to sustain and enhance the position of the country in the competitive world market, the Prime Minister stressed.

“Our government will pay closest attention to the recommendations of the four working groups presented at the summit.

These will help us devise appropriate strategies to further promote its growth and competitiveness,” the Prime Minister assured.

Describing the textile sector as one of the pillars of Indian economy, the Prime Minister said the government was willing to help the industry to meet the challenge of generating more employment. The textiles sector is the second largest provider of employment after agriculture.

Stating that textile sector could be a vehicle for nationwide industrial modernisation and revitalisation of traditional skills and designs, he said it accounts for the seventh of India’s industrial production and contributes about 20 per cent of the country’s merchandise exports.

He called upon the Textile Ministry to work in tandem with the growing fashion industry to step up the textile growth at 15 per cent per annum. “We can emerge as a major manufacturing hub for the global market provided the Ministry is able to harness the opportunities available to it,” he said.

Urging the textile sector to work with a long-term vision, the Prime Minister regretted that India’s exports had not gathered momentum after the dismantling of restricted regime. But, at the same time, he offered government help to the industry to overcome various hurdles so that it could emerge on the world scene in a big way.

The PM said the government was aware that availability of high quality infrastructure is one of the major bottlenecks on the way to the industry’s growth. Cost of power, appreciation of Indian rupee and shortage of trained manpower are other constraints hampering the growth and these need to be addressed.

The government, he said, has provided relief to the industry by revising duty drawback rates and by providing pre and post-shipment credit. “We are alive to the evolving situation and will take all possible measures to ensure that the real, productive portion of our economy was not hurt by the appreciation of rupee.”

Calling for upscaling the operations to achieve optimum economic efficiencies in production, the Prime Minister asked the textile industry to follow the model of automotive industry and other sectors of economy that have demonstrated the ability to become more productive and efficient. “You will have to engage in ruthless cost-cutting so that you become competitive.” — UNI

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Flame may spark lawsuit
Bajaj alleges patent violation by TVS

New Delhi, September 1
Country's second largest two-wheeler manufacturer, Bajaj Auto Ltd is planning to sue south Indian rival TVS Motor Co for "infringing" upon intellectual property rights of its patented digital twin-spark ignition (DTSi) technology.

Bajaj Auto's move to sue TVS comes two days after the Chennai-based company announced plans to roll out its latest 125 cc bike, Flame, with Controlled Combustion Variable Timing Intelligent (CC-VTi) technology.

"This is a case of IPR infringement issue. Prima facie we have a strong case. While we have had Chinese companies infringing our patented technology, this is the first time a fellow Indian company is doing it to us," Bajaj Auto Ltd (BAL) CEO (two-wheelers) S.Sridhar said.

He said the company was convinced that there was a clear case of IPR violation by TVS on three counts and the company's legal department was preparing to go to court at the earliest.

"The first is the purpose for which they are doing it (use of twin spark ignition for enhanced performance and better mileage). Secondly, the size (of engine) is same and third, construction of engine is also the same," Sridhar added.

BAL's some of the most popular models, Pulsar and Discover, are powered by DTSi engines and Sridhar said the company holds the global and Indian patent for the technology for small engines.

TVS had claimed that Flame was powered by an engine with CC-VTi technology, which features two different intake ports called swirl port and power port.

TVS CMD Venu Srinivasan had said that the company planned to sell about 30,000 to 35,000 per month after the model's proposed market launch by November.

Reacting to Bajaj Auto's plans to move court TVS Motor company vice-president Corporate Communication Cecil K. Dewars said: "TVS has not infringed on anyone's technology." — PTI

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PSB director Josh resigns

New Delhi, September 1
Harcharan Singh Josh, one of the five directors of state-run Punjab and Sind Bank who rallied for the removal of the bank’s chairman, has resigned for reasons of perceived autocratic atmosphere.

In a letter to Prime Minister Manmohan Singh, Josh said: “I am feeling suffocated in such an atmosphere under the (present) circumstances and I strongly feel that I should relinquish the office.” He alleged that PSB Chairman R P Singh was functioning like an autocrat for serving his personal ends and denigrating the directors.

“He also tried to malign my personal image by entangling my name with some of the defaulters,” he said. Five of the bank’s directors, had earlier this year, accused Singh of favouritism in sanctioning a Rs 150-crore loan. — PTI

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LIC plans credit cards

Bhopal, September 1
Public sector insurance major Life Insurance Corporation of India (LIC) is all set to foray into the growing credit card market soon.

“Besides foraying into the health insurance sector, the company will also launch credit cards at the earliest to tap the growing market,” LIC zonal manager RV Rao said on the occasion of celebrating 51st year of LIC.

“The idea behind launching the credit card was the steady flow of cash with the LIC and initially the cards will be issued to policy holders through which they can also pay insurance premiums, besides using the plastic money as any other credit card,” he said. — PTI

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Aviation Notes
ATC shortage deepens as flights multiply
by K.R. Wadhwaney

Increased flights, shortage of experienced air traffic controllers (ATCs), age-old rules and lax control of the Airports Authority of India (AAI) are the main factors for ‘near-miss’ incidents at the Indira Gandhi International Airport (IGIA).

Worldwide, ATCs are main functionary for take-off and landing of aircraft. But sadly, the quantum of ATCs has not increased to the extent national and international flights have multiplied. The ATC authorities have been screaming for additional staff but unfortunately the AAI has failed to take effective measures.

The standard operating procedures (SOPs) need immediate revision to help prevent ‘near miss’ incidents. During the last five months as many as five — two international aircraft and three domestic planes — have come within striking range of one nautical miles instead of five. Luckily, ATCs have been able to separate aircraft at the nick of the time.

Two runways — main (28/10) and subsidiary (27/09) — are not parallel. when two aircraft take-off in the direction of Dwarka, their flight path converge within two nautical miles. This is dangerously close to striking range. If pilot or ATC errs and fails to take prompt action of separation, accident becomes imminent. Luckily, ‘close shaves’ have remained ‘near-misses’ but it is time authorities take effective remedial measures.

Aviation analysts feel that further widening of corridor for landing and taking off may be essential. Analysts believe that it may be divided in four zones — east, west, north and south — instead of current two (west and east).

Experienced pilots of proven ability are of the view that the main runway should be dedicated for arrival and subsidiary runway for departure. This will reduce chances of mishap taking place.

According to analysts, it will be beneficial if ATCs function under directorate-general of civil aviation because the DGCA has quite a few technical experts. “This change is worth trying”, said three senior pilots.

Soon, domestic operations will be extended to night flying. This may reduce congestion during day time but busy hours will increase manifolds. The busier the schedule, more the ATC requirement.

Quite a few foreign carriers are planning operations ex-Delhi. Soon private airlines will be allowed operations on international routes as rules are being modified. The competition between Air India and private carriers will increase. This is a healthy development because stiffer the competition, the better will be the functioning of carriers. The emphasis is on level play-field for both national airlines and private operators. Why not?

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Investor Guidance
NRIs need PINS account to dabble in scrips
by A.N. Shanbhag

Q: I am 30 years old and have so far lived in India. I have invested in shares, mutual funds, public provident fund (PPF) and life insurance policies. I also own an apartment. Now, I have been offered a job in the US and intend to relocate there. It seems that I would be based in US at least for the next decade, if not more.

This leads to a number of questions, essentially to do with my investments. Can I continue to buy and sell shares as I have been? What about mutual funds? Also, regarding PPF and life insurance, would it be possible for me to transfer the same to my US bank as and when these investments mature?
— Kotkar

A: Even after you move to the US, you can continue to invest in the PPF account till 15-year period. Upon maturity, the monies will be credited to your NRO account in India (which you will have to open if you have not already). Ditto for life insurance maturity proceeds. These monies can be remitted to the US if you so desire. You can continue to hold your mutual fund investments, buy or sell as you desire. Again, the sale proceeds, net of applicable taxes, if any can be credited to the NRO account and remitted therefrom abroad.

Regarding shares, Indian laws allow you to buy and sell shares on any Indian stock exchange even if you are US based. However, you will have to open a separate demat account for the same known as the PINS (portfolio investment scheme) demat account. After obtaining the status of an NRI, you can trade in this PINS demat account only. As far as your already existing share investments are concerned, the same will have to be transferred to a non-PINS demat account.

You will not be allowed to buy into this non-PINS demat account, you can only sell from the same. Of course, if you have a long-term horizon, you may continue to hold the shares. Just remember that no additions are allowed in the non-PINS demat account. Just like in the case of mutual funds, amounts representing sale proceeds of shares can be remitted abroad.

Also note that the total amount that can be remitted abroad from your Indian investments made before you became an NRI is limited to $1 million per annum. Investments made after becoming NRI, if effected through the NRE account, can be repatriated abroad without any limit.

US-based funds

Q: Reference your advice under the column in The Tribune dated August 19, 2007, may I request you to enlighten us further on the following specific issue:

My son is an NRI working in the USA almost since last six years. He wants to invest in India through mutual funds. I have been told that NRI staying in USA in particular cannot invest in Indian MFs due to some legal bars. What is the real position in this case? If he can, what is the detailed procedure? He has PAN card.
— Ramesh C Pahuj

A: Due to SEC (US regulator) diktats, funds which are US-based like Templeton, Fidelity and HSBC do not accept investments from NRIs. However, other domestic MFs do accept such investments and your son is free to invest in them.

Short-term gain

Q: I have sold a residential flat after keeping it for two years. What are the tax implications and avenues to save tax on the capital gain arises?
— Rupal

A: In your case, as the residential flat has not been owned for a term of in excess of three years, the same would be treated as a short-term asset and any capital gain resulting thereon would be short term in nature. Short term gains do not carry any scope of tax reduction by way of reinvestment and are taxable at your applicable slab rate.

Service bond

Q: My son left his previous job with a multinational company. He had a service bond of Rs 5 lakh to serve them up to a particular date. Due to some personal reasons, he had to leave the company earlier and accordingly had to pay the Rs 5 lakh penalty. Can this sum be deducted from the salaries received from them for income tax purposes? If yes how? If no then why not?
— Kedar

A: There is no provision in the Income-tax Law for deduction of payment made to the previous employer on account of the violation of service bond. Hence, this amount cannot be deducted from the salary received from new employer.

Saving for child

Q: My wife and I have our own PPF accounts started in 2001. Unfortunately, in the earlier four years we did not invest full Rs 60,000/70,000. We are both salaried and tax payers in 30 per cent bracket. Now we have a three-year -old kid and would like to make a 'safe' provision for her college studies.

Can my wife gift Rs 70,000 to my father (who is retired and into nil tax bracket), so that a PPF account can be opened in his name and we get a tidy sum for our kid's college? Of course, my wife does not intend to get tax benefit u/s 80C as she already has her own PPF account.

So, a) does my father who receives gift pay IT on this sum, and b) post maturity can he gift the entire sum to our kid or my wife for that matter or c) what is the taxability status out of this whole scenario?
— AJ Joshi

A: Your wife or you can gift any amount to your father and the same will not be taxable for either party. This is as per Section 56. Then your father can use the amount for any purpose including investment in PPF. In turn, your father may nominate his grand daughter as the nominee to receive the proceeds of PPF.

Alternatively, he may also gift the amount to her either when the account matures or periodically too by using the facility of part withdrawal in PPF. Therefore, basically, yes, you may take advantage of the presence of the grand father to build up a substantial corpus for your daughter as she grows up.

Also, congratulations on having understood the best way to invest for your child — most people succumb to the sentimental marketing spiel spouted by insurance companies and thereby end up making sub-standard investments for their child.

The authors may be contacted at wonderlandconsultants@yahoo.com

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BRIEFLY

CPI-IW up
Shimla, September 1
All India Consumer Price Index number for industrial workers (CPI-IW) on base 2001=100 has increased by two points to 132 in July. The inflation based on the index, which tracks prices of a specific set of goods and services accessed by these workers, increased from 5.69 per cent in June to 6.45 per cent in July. The index recorded an increase of eight points in Bhilai centre, seven points in Bhavnagar and six points each in Siliguri and Ranchi-Hatia. It decreased by two points each in Ludhiana and Quilon centres and one point in Jalpaiguri. — PTI

IOB to expand
Machiliapatnam, September 1
The Indian Overseas Bank (IOB) is planning to open three more overseas branches in New Zealand, Dubai and China. Talking to newspersons, after inaugurating a new branch here today, IOB General Manager D K Patel said to cater to the increasing number of its customers, the bank was planning to set up 300 more ATMs in the country. He said the bank had over 1800 branches at present, including the overseas branches in Sri Lanka, Hong Kong, Singapore, Seoul and Bangkok. — UNI

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