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Spectrum Release
DoT, DefenceMin finalising pact

New Delhi, September 16
The Department of Telecom (DoT) and the defence ministry are in the process of finalising a pact that will pave the way for release of spectrum by the armed forces for second and third generation mobile services by April 2008.

IFCI chief resigns, move not to affect sale
New Delhi, September 16
N Balasubramanian, chairman of ailing industrial lender IFCI, which is looking for a strategic partner for stake sale, has resigned citing his conflicting role as adviser to one of the bidders.

SBI staff to go on strike against merger
Mumbai, September 16
Employees of the six associate banks of State Bank of India will go on a daylong strike on September 27 to protest the merger of these banks with SBI.


IT/BPO wages not likely to come down.
(56k)

Bharti wins domain dispute on bhartiairtel.com 
New Delhi, September 16
Ruling in favour of Bharti Airtel, international IPR watchdog WIPO has directed a Saint Kitts-based company to transfer the domain name bhartiairtel.com to the domestic telecom major.

Guidelines on short-selling soon: SEBI
Mumbai, September 16
Institutional investors in Indian stock market will soon be able to sell shares without owning them with regulator SEBI saying rules for short-selling will be announced “very soon”.

Unbundling Last Mile Network
BSNL, MTNL may go to TDSAT
New Delhi, September 16
State-owned telecom firms BSNL and MTNL today said regulator TRAI’s direction on opening up Domestic Leased Circuit (DLC) would lead to hoarding of last mile connections by the private sector, rendering the two PSUs uncompetitive.


Iran’s acting Oil Minister Gholam Hossein Nozari looks on during a press conference in Tehran, on Sunday. Iran expressed impatience with India over the finalising of a multi-billion dollar gas pipeline deal via Pakistan, warning that it could “go ahead” with Pakistan alone if India procrastinated
Iran’s acting Oil Minister Gholam Hossein Nozari looks on during a press conference in Tehran, on Sunday. Iran expressed impatience with India over the finalising of a multi-billion dollar gas pipeline deal via Pakistan, warning that it could “go ahead” with Pakistan alone if India procrastinated. — AFP photo

 

EARLIER STORIES

 

Honda recalls 1.8 lakh Civics
New Delhi, September 16 
Honda has recalled over 1.8 lakh units of its luxury sedan Civic globally. The company is also studying whether the model in India, too, had defective wheel-bearing seal before deciding on the same strategy here. “We have received a notice for a global recall. We are not sure if this would affect here,” Honda Siel Car India senior GM (Marketing) Jnaneswar Sen said today. — PTI

Market Scan
Market outlook bleak
by J.C. Anand
Last week the Sensex closed at 15603.80 points (only 265 points short of its all-time high) but the market outlook appears to be rather bleak. The Index of Industrial Production (IIP) released by the Central Statistical Organisation (CSO) last week indicated that the industrial production growth has decelerated to a nine-month low at 7.1 per cent in July as against a growth of 13.2 per cent in the same month last year.

Tax Advice
LTC not taxable if actually availed
by S.C. Vasudeva
Q. Please clarify whether
(i) Fixed medical allowance given to Pb. Govt. employees/pensioners is taxable or not?
(ii) Similarly whether L.T.C. given to Pb. Govt. pensioners once in block of 2 years, equivalent to one basic pension is taxable or not?
— Bhupinder Singh, Mohali

 

 

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Spectrum Release
DoT, DefenceMin finalising pact

New Delhi, September 16
The Department of Telecom (DoT) and the defence ministry are in the process of finalising a pact that will pave the way for release of spectrum by the armed forces for second and third generation mobile services by April 2008.

The MoU, to be signed soon, will lay down the roadmap and schedule of phase-wise spectrum vacation by Ministry of Defence (MoD) as well as action to be taken by both DoT and MoD to create an alternative modern communication network for the Army, Navy and Air Force.

As per the draft MoU, suggested by Group of Ministers (GoM) on spectrum headed by Pranab Mukherjee, defence forces will vacate 25 Mhz for 2G (normal voice and data services) by April 2008. This will be in phases -- 5 Mhz of radio waves immediately in Delhi and Mumbai, 10 Mhz by January and another 10 Mhz by April next - varying from circle to circle.

On the roadmap for third generation or 3G services, the ministry is to release up to 30 Mhz of spectrum by April. Out of this, depending on the circle up to 20 Mhz spectrum January and another 10 Mhz by April is proposed to be released.

In 3G, Delhi will get the maximum 3G spectrum of 30 Mhz and Mumbai will get 20 Mhz. But the condition is that defence forces will shift from the tropo-scatter and microwave links, the technologies they use at present, to the optical fibre link as and when the new system is provided. These present wireless communication technologies used by defence ministry are said to be spectrum-inefficient.

As per the draft MoU, DoT will obtain approval from the Telecom Commission and Cabinet Committee on Economic Affairs of Rs 1,040.16 crore for execution of first phase, under which an alternate communication network for Indian Air Force is to be put in place.

The DoT would also facilitate consultation among BSNL, Army and Navy for working out modalities for second phase of the alternate communication network for Army and Navy.

After finalisation of modalities for the second phase, the department will take necessary steps to obtain approval of Telecom Commission and CCEA for sanction of requisite funds for execution of second phase.

As per the draft, alternate communication network for Indian Air Force will be provided at 162 locations in the first phase. Both the ministries will make efforts to complete first phase in 54 sites and second phase 39 sites by December 2007. Work on the remaining 69 sites will be completed by March 2008. — PTI

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IFCI chief resigns, move not to affect sale

New Delhi, September 16
N Balasubramanian, chairman of ailing industrial lender IFCI, which is looking for a strategic partner for stake sale, has resigned citing his conflicting role as adviser to one of the bidders.

The development would not affect the process of 26 per cent stake sale by IFCI as financial bids from interested parties were yet to be invited, a key company official said.

Balasubramanian, who resigned with immediate effect before Expressions of Interest (EoI) from 10 entities were opened yesterday, is no longer IFCI Chairman, the official said, speaking on condition of anonymity.

The board would ratify his decision, besides taking up “other routine issues” at its meeting scheduled for September 20. The board meeting will be followed by shareholders’ meeting the next day, the official added.

Balasubramanian was also adviser to Standard Chartered Bank, one of the entities in a consortium, which has submitted EoI. A consortium-led by WL Ross, including Standard Chartered Bank, Goldman Sachs and HDFC Ltd has submitted the EoI.

Efforts to revive IFCI moved ahead after Balasubramanian assumed charge of the office in early August this year. EoIs were invited from August 13.

The company will evaluate the EoIs and announce the shortlisted investors on September 25.

Thereafter, the shortlisted entities would be asked to undertake due diligence and submit bids indicating the price they would be willing to pay for the 26 per cent stake.

Based on the technical and financial bids, the board would finalise the name of strategic partners. Request For Proposal would be floated by mid-October. The pre-qualified investors will need to submit sealed financial bids by November end. — PTI

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SBI staff to go on strike against merger
Tribune News Service

Mumbai, September 16
Employees of the six associate banks of State Bank of India will go on a daylong strike on September 27 to protest the merger of these banks with SBI.

However, employees of the State Bank of Saurashtra, which is being merged with SBI, are not likely to go on strike, according to the State Sector Bank Employees Association.

According to the association more than 45,000 employees of the associate banks will be on strike. In addition employees of State Bank of Indore, too, will be on strike, said the association.

C.H. Venkatachalam, general secretary, All India Bank Employees Association, said the merged entity would emerge as a corporate monolith, which would shed its role of social responsibility.

The AIBEA is now planning a nation-wide strike to protest the proposed consolidation of banks ahead of the Basel II norms.

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Bharti wins domain dispute on bhartiairtel.com 

New Delhi, September 16
Ruling in favour of Bharti Airtel, international IPR watchdog WIPO has directed a Saint Kitts-based company to transfer the domain name bhartiairtel.com to the domestic telecom major.

Saint Kitts-based Marketing Total had registered the domain bhartiairtel.com in its name and has been sponsoring links to other websites offering cellular phone services and sale of phones, which were closely related to telecom giant’s business.

“The domain name registered by the respondent is identical or confusingly similar to the trademark or service mark in which complainant (Bharti Airtel) has rights. The respondent has no rights or legitimate interests in respect of the domain name and it has been registered and is being used in bad faith,” said World Intellectual Property Rights Organisation (WIPO) panelist Francine Tan in his order.

WIPO is a UN agency tasked to protect intellectual property rights internationally.

Bharti Airtel (formerly Bharti Televentures), which owns the joint trademark of Bharti and Airtel, had contended before the WIPO panel that the domain name was very similar and identical to its corporate name and also similar to the two main trade marks, Bharti and Airtel, owned by it.

Moreover, it also contended that by virtue of time, Airtel has become a household name in India. It was also a well-known trademark and they were sole proprietor of it.

Interestingly, respondent Marketing Total Ltd even did not filed reply over the contentions made by the telco. — PTI

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Guidelines on short-selling soon: SEBI

Mumbai, September 16
Institutional investors in Indian stock market will soon be able to sell shares without owning them with regulator SEBI saying rules for short-selling will be announced “very soon”.

“We are ready for it (short-selling) now... there is no hiccup and the regulations are coming very soon,” Securities and Exchange Board of India chairman M Damodaran told PTI in an interview.

Short-selling means borrowing a security from a broker and selling it with the understanding that it must be later bought back and returned to the broker. This is used by investors looking to profit from falling price of stock. Damodaran said the guidelines were almost finalised and just a few formalities were left.

Open to hedge funds

MUMBAI: SEBI says hedge funds are welcome to invest in India, provided they comply with the existing regulations for foreign institutional investors (FIIs).

“Why should we be worried about hedge funds... We are not making any separate set of regulations for them... they have been investing in India through participatory notes. All we are telling them is if you want to come here, come through the front door,” Damodaran said. — PTI

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Unbundling Last Mile Network
BSNL, MTNL may go to TDSAT

New Delhi, September 16
State-owned telecom firms BSNL and MTNL today said regulator TRAI’s direction on opening up Domestic Leased Circuit (DLC) would lead to hoarding of last mile connections by the private sector, rendering the two PSUs uncompetitive.

The two PSUs have also not ruled out the possibility of challenging TRAI’s order in the telecom dispute settlement tribunal TDSAT.

Sources said TRAI’s latest regulation on DLC is nothing but a reversal of government’s stated principle and policy of not unbundling the local loop (last mile of copper wires that connect individual homes/offices with local exchanges) and thus questioned the regulator’s jurisdiction on the same.

BSNL and MTNL are the only operators who have laid maximum cable between the exchange and the subscribers’ premises and attempts have been made earlier to unbundle this for the use by the private operators.

TRAI had earlier, under the chairmanship of Pradip Baijal, recommended this and the same was rejected both by the then Telecom Minister Dayanidhi Maran and the two PSUs. As per TRAI’s regulation order, it mandates the service providers to confirm availability or otherwise to requesting service providers within 30 days.

BSNL officials said unblocking of last mile network had been done through a commercial relationship so far, but now with this regulation this would become a mandate.

Asked what would be next step, they said there was no option but to challenge the order legally.

When contacted S D Saxena, Director (Finance) and his MTNL counterpart Anita Soni said they would take an appropriate decision after examining the order.

TRAI had said that these regulations would benefit both the customers and the service providers. But the telecom PSUs are of the view that the subscribers would be the main loser. — PTI

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Market Scan
Market outlook bleak
by J.C. Anand

Last week the Sensex closed at 15603.80 points (only 265 points short of its all-time high) but the market outlook appears to be rather bleak. The Index of Industrial Production (IIP) released by the Central Statistical Organisation (CSO) last week indicated that the industrial production growth has decelerated to a nine-month low at 7.1 per cent in July as against a growth of 13.2 per cent in the same month last year. The manufacturing sector was down by 7.2 per cent, electricity by 8.1 per cent, mining by 3.1 per cent. The growth in the consumer goods was slower by 5.3 per cent in July 2007 compared with 7.9 per cent so far this year, with the consumer durable sub-segments declining by 3.2 per cent. A day after the data were released, another release by CSO indicated that the six core infrastructure sectors (cement, steel, coal, power, crude and petroleum refining) declined by 6.3 per cent in July 2007 against 10.9 per cent in the same month last year.

It appears that the industrial growth rate will move down slowly during the remaining months of the current financial year. High interest rates, sub-prime crisis in USA, political uncertainty in India, populist policies of the government, and the forthcoming elections in some state legislatures are some of the major factors likely to affect industrial growth adversely. There are also reports that some-sub-prime crisis has also surfaced in the UK and the British mortgage lender, Northern Rowck got emergency funding from the Bank of England. The US and European markets are also in a turmoil and some Asian markets are also moving down.

It is, therefore, not a proper time to make fresh investments. One may, however, keep some promising investment proposals on the watch-list and in case the market price of such companies further declines, investments may be made as long-time investments.

Keep Guj Alkalies on watch list

Gujarat Alkalies and Chemicals is one such company that has low P/E ratio and high EPS ratio. Gujarat Alkalies is the largest single producer of caustic soda in India. It is a multi-product company manufacturing 26 products. Around 66 per cent of its revenue comes from chlor-Alkali business and 34 per cent revenue from other value-added products.The company has a 17.8 per cent share in the domestic chor-Alkali industry. Gujarat Alkalies was established in 1973 as a wholly-owned subsidiary of Gujarat Industries Investment Corporation (GIIC) and now 40.48 per cent shares of the company’s equity are held by the GIIC and other Government of Gujarat corporations etc. For the financial year ended March 31, 2007, the company’s net profit was Rs 18655 lakh on equity capital of Rs 7344 lakh with an EPS of Rs 25 per share. It has already announced that the company would be investing Rs 500 crore in new projects and in augmenting power generation capacity. It has decided to extend the caustic-chlorine production capacity by 300 tonnes a day. Hydrogen Peroxide project was commissioned in June 2007. The company’s book value is Rs 96 for its Rs 10 face value equity share. Last Friday, the company’s scrip closed at Rs 153/40 with P/E ratio of Rs 5.37. The Gujarat Alkalies projects a safe and attractive investment for a long-term investor. The company has high reserves. Its “share premium account” stands at Rs 23426.18 lakh and “general reserve”, in addition to its “profit and loss account”, stands at Rs 41969.63 lakh. The scrip has been fluctuating during the last year between Rs 108 and Rs 195. The investor may wait to put money in this scrip for the market to slide down during the coming months.

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Tax Advice
LTC not taxable if actually availed
by S.C. Vasudeva

Q. Please clarify whether

(i) Fixed medical allowance given to Pb. Govt. employees/pensioners is taxable or not?

(ii) Similarly whether L.T.C. given to Pb. Govt. pensioners once in block of 2 years, equivalent to one basic pension is taxable or not?

— Bhupinder Singh, Mohali

A. (i) Fixed medical allowance would ordinarily be taxable. However, in case it can be proved that such allowance is to meet the actual expenditure incurred on medical expenses of yourself and your family, the same would not be treated as a perquisite provided the expenditure as incurred is duly supported.

(ii) The amount of Leave Travel Concession would be exempt from tax provided the same has actually been incurred for travel of the former employee and his family in connection with his proceeding to any place in India.

NRO account

Q. My son went to the USA in June 06 with H 1 B Visa and is doing residency in medicine. His wife and two children went along with him with H 4 Visa. My questions:

1. Is it necessary to convert their saving a/c into NRO/NRI a/c.

2. How much money can he/she repatriate to the USA from their saving/ NRO/NRI a/c in a year.

3. How much money can we (parents/relatives) send to him to the USA from our a/c in a year.

— C.L. Goyal

A. (a) In accordance with the provisions of Foreign Exchange Management Act 1999 (FEMA), a person is considered to be resident outside India, if he is not a resident in India. A person resident in India means a person who is residing in India for more than 182 days during the course of the preceding financial year but does not include a person who has gone out of India or who stays outside India in either case:

(i) for or on taking up employment outside India, or

(ii) for carrying on outside India a business or vacation outside India, or

(iii) for any other purpose in such circumstances as would indicate his intention to stay outside India for an uncertain period.

On the basis of facts in the query, your son, daughter-in-law and their children were not residing in India in the financial year 2006-07 for more than 182 days. Further, it is not possible to ascertain from the facts given in the query whether they have gone out of India with an intention to stay outside India for an uncertain period.

Since the wife and children have also gone, it may be possible to conclude that your son has gone with an intention to stay out of India for an uncertain period. If that be the case, it would be necessary to convert his savings account into NRO i.e. non-resident ordinary account.

(b) As far as India is concerned there is no limit with regard to the receipt of amount from your son.

(c) It is now permissible under FEMA to send a sum of $ 1,00,000 per year to your relatives for family maintenance.

IT return

Q. I am a senior citizen, hold PAN and my income is less than Rs 1,85,000/-. So, as per your advice, I am not required to file return of my income. But the point is that I hold PAN and, therefore, the ITO must be having a separate file for me and to complete that file, I must tell the ITO the reason for not filing the return. Otherwise, he will raise objection for my not filing the return. My query is:

In what manner, should I tell the ITO the reason for not filing the return. Is there any form prescribed for the purpose?

— Raja Ram, HP

A. As advised to you earlier you are not required to file return in accordance with the provisions of the Income-tax Act 1961 (the Act). The Assessing Officer has all powers to issue a notice under Section 142(1) of the Act requiring you to file the return. In case he chooses to do so, you can file the return at that point of time in response to his notice. The income shown in the return in any case would be below the taxable limit. The Permanent Account Number held by you may have to be used for some other purposes required under the provisions of the Act. There is no prescribed form for informing the Assessing Officer. In case you want to adopt this course, a simple letter to him would suffice.

II

Q. I am a senior citizen. I have PAN from the Income Tax Authorities. My total income is less than Rs 1,85,000.

It is clear that I am not to file the I.T. return. Kindly tell, whether I have to return the PAN to the income tax authorities.Also clarify, if I have to inform the income tax authorities.

— Balkrishan Ghai, Jalandhar

A. You need not return the Permanent Account Number to the income-tax authorities as the same may have to be used for other purposes as specified in section 139A(5)(c) of the Act.

Form 15H

Q. I am a senior citizen aged 66. Presently my annual income without availing any rebates like under Section 80C etc is below Rs 1,95,000/-. I am filing my return regularly without any tax liability.

Can I submit Form 15H to the bank for not deducting TDS on my interest income which is about Rs 67,000 p.a. from senior citizen savings scheme?

— S.P. Gambhir, Karnal

A. Yes, you can file Form 15H to the bank for non- deduction of tax at source from the interest income. On the basis of such declaration, the bank should not deduct tax at source from your interest income of Rs 67,000/-.

Tax liability

Q. I am a family pensioner and senior citizen and my income for F.Y. 2006-07 is given below:

Income from pension : Rs 76,000 per annum

Income from interest on fixed deposits : Rs 1,02,000

Agricultural income : Rs 38,000 annual

Please calculate my income tax

— Harbans Kaur, Mohali

A. Your total income works out at Rs 1,78,000/- The same being below the amount of Rs 1,85,000/- (the amount up to which no tax is chargeable in case of a senior citizen for financial year 2006-07) no tax would be payable in respect of the above income, including the agricultural income. 

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