SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

B U S I N E S S

Telecom Tangle
Mobile aspirants seek licences
May take legal course in case of delay

New Delhi, November 18
The telecom tangle has taken a new turn with some aspirants asking the government to immediately issue licences under the existing policy and threatening to explore legal options in case of further delay. The development comes at a time when the Department of Telecom is already grappling with the battle between CDMA operators, most notably Reliance Communications, and GSM mobile players.

Airtel broadband renamed
New Delhi, November 18
Bharti Airtel today renamed its broadband & telephone services business as Telemedia Services in the light of growing focus on new media solutions and its foray into IPTV and DTH business.

India, Asean to hold talks on free trade pact
Singapore, November 18
India and South-east Asian nations are set to engage each other in complex negotiations on Tuesday here to seal a free trade pact before their top leaders meet for summit-level talks later this week.

First Islamic MF in the offing
New Delhi, November 18
The country is likely to get its first Islamic mutual fund soon as a Delhi-based asset management company Taurus has approached capital market regulator SEBI to launch such a product based on the Sharia laws.


EARLIER STORIES

 
A worker arranges trays of eggs at a wholesale shop in Hyderabad on Sunday. According to industry sources, Andhra Pradesh poultry farmers export as many as 25 millions eggs a day to other Indian states, mostly northern ones, while the state's total production of eggs is around 55 millions a day.
A worker arranges trays of eggs at a wholesale shop in Hyderabad on Sunday. According to industry sources, Andhra Pradesh poultry farmers export as many as 25 millions eggs a day to other Indian states, mostly northern ones, while the state's total production of eggs is around 55 millions a day. — AFP photo

Gulf Oil buys Petromin for $200 m
Dubai, November 18
Gulf Oil International, part of Hinduja Group and Dabbagh Group of Saudi Arabia, have bought Petromin, a joint venture between Saudi Aramco and Mobil Investments, for $200 million. The buying underlines growing inflow of capital from India to the Kingdom's energy sector.

Future Group targets Rs 30,000-cr
revenue

Mumbai, November 18
At a time when some big retailers are facing opposition from small traders, Kishore Biyani-led Future Group has said its expansion plans are on track and it hopes to meet the revenue target of Rs 30,000 crore by 2010. Future Group's CEO, innovation and incubation, Damodar Mall said the group plans to set up more fair price shops, Big Bazaar and Food Bazaar outlets across the country

Caparo enters US market
London, November 18
NRI industrialist Lord Swraj Paul-led Caparo Group has entered the North American vehicle market with the creation of Caparo Vehicle Components Inc and the acquisition of the assets of a Michigan-based firm.
Vistors throng at the India International Trade Fair in New Delhi on Sunday. As many as 44 countries and 27 Indian states are participating in the 14-day multi-product show focusing on the theme of tourism, industry and promoting exports of small and medium-sized companies.
Vistors throng at the India International Trade Fair in New Delhi on Sunday. As many as 44 countries and 27 Indian states are participating in the 14-day multi-product show focusing on the theme of tourism, industry and promoting exports of small and medium-sized companies. — AFP photo

Market Update
Bourses again in bullish zone
Despite sub prime woes that continue to plague the US, Indian markets continued their winning streak, as Sensex gained 4.2 per cent for the week at close at 19,698 and Nifty gained 4.3 per cent to close at 5,906. Markets also shrugged off the disappointing industrial production data for September 2007.

Tax Advice
No tax on GPF withdrawals
Q. I have following queries:
I Is GPF deposited under Section 80-C free from income tax when withdrawn subsequently as the withdrawal from GPF is quite easy? If so, up to how much permissible period after its deposit?
II What is the full form of 'EEE' and 'EET'?
III Whether 'EET' regime has been announced by the finance minister and it is applicable in current financial Bill (2007-08).
— Baldev Singh Thakur, HP

 
Video

Reliance forays into jewels.
(56k)

 

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Telecom Tangle
Mobile aspirants seek licences
May take legal course in case of delay

New Delhi, November 18
The telecom tangle has taken a new turn with some aspirants asking the government to immediately issue licences under the existing policy and threatening to explore legal options in case of further delay.

The development comes at a time when the Department of Telecom is already grappling with the battle between CDMA operators, most notably Reliance Communications, and GSM mobile players such as Bharti Airtel and Vodafone Essar over allocation of airwaves to expand services.

When contacted, HFCL managing director Mahendra Nahata said: "It is strange that the government has not issued LoIs (Letters of Intent) to the waiting applicants... it is contrary to the New Telecom Policy, UASL (unified access service licence) guidelines and even the Cabinet decision that LoIs would be issued on non-exclusive basis."

Echoing similar views, Parsvnath Developers chairman Pradeep Jain said being an applicant it was expecting that government would issue LoIs at the earliest.

"The government must allot spectrum to new applicants and licencees because existing operators who have been issued spectrum in the past 7-8 or 10 years have not been able to roll out services in many circles," Jain said.

In the past two years, the government has issued more than 50 licences or LoIs under the existing guidelines. It had received nearly 575 applications from 46 companies for new telephony licences after it announced a cut-off date of October 1 for receiving new applications.

Jain said, "new applicants must be treated at par with existing operators in terms of spectrum allocation, spectrum charges or roll-out obligations."

Nahata said the government's action of not issuing LoIs so far is contrary to telecom regulator TRAI's recommendations that there should be no cap on number of players. This recommendation has also been accepted by the government.

The beneficiaries of the existing policy include Aircel Ltd, Bharti Airtel, Dishnet Wireless, Essar Spacetel, Idea, Vodafone-Essar, Tata Teleservices and Aditya Birla Telecom.

New applicants include AT&T, DLF, Parsvnath, Bycell, Unitech, HFCL, Shyam Telecom and 13 of them have applied for pan-India licenses. The lobby of GSM players, Cellular Operators Association of India (COAI), had earlier demanded in the tribunal TDSAT that there should be a stay on issuing of LoIs, which was rejected by the tribunal.

COAI has also said if LoIs are issued to all prospective licencees, it would seriously hamper investors' confidence. — PTI

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Airtel broadband renamed

New Delhi, November 18
Bharti Airtel today renamed its broadband & telephone services business as Telemedia Services in the light of growing focus on new media solutions and its foray into IPTV and DTH business.

An Airtel release said since the world was increasingly moving towards convergence with an amalgamation of voice, data and video, Bharti Airtel has decided to rename the operations to further reinforce its undisputed position as India's largest integrated telcom services provider. — TNS

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India, Asean to hold talks on free trade pact

Singapore, November 18
India and South-east Asian nations are set to engage each other in complex negotiations on Tuesday here to seal a free trade pact before their top leaders meet for summit-level talks later this week.

Prime Minister Manmohan Singh, who is leading the high-level Indian delegation for the top summit, is set for wide ranging discussions with the leaders from the Association of South East Asian Nations (Asean) aimed at sorting out FTA issues to bolster the two-way trade which crossed $30 billion in 2006-07.

Indian commerce and industry minister Kamal Nath will hold consultations a day in advance with his counterparts from Malaysia, Vietnam, Indonesia and Brunei on New Delhi's offers on market access to Asean on agriculture products.

Leaders of Asean, meeting this week for their annual summit, are due to sign a blueprint for creating a vast single market and production base covering about 570 million people by 2015.

After 40 years of its formation and more than two years of intense negotiations, Asean is on the verge of transforming itself into a more effective and rules-based organisation when its leaders ink the historic Asean Charter at their annual summit opening here this week.

The path to the new Asean Charter was not without its problems, senior Asean officials said here.

"The different national interests of the 10 different countries had to be reconciled," said Ambassador-atlarge Professor Tommy Koh, a member of a group of senior Asean officials responsible for drafting the Charter.

"There were naturally some moments of drama and tension caused partly due to differences of substance and partly due to clashes of personalities," he said here, adding that one of the most contentious issues was whether to set up a human rights body and the form it should take. — PTI

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First Islamic MF in the offing

New Delhi, November 18
The country is likely to get its first Islamic mutual fund soon as a Delhi-based asset management company Taurus has approached capital market regulator SEBI to launch such a product based on the Sharia laws.

"Subject to approval from SEBI, we expect to mop up Rs 500 crore from Taurus Parasoli Ethical Fund," Taurus Mutual Fund managing director R K Gupta told PTI here.

Detailing the features of the five-year close-ended fund, Gupta said it would invest in stocks that are shariat-compliant, or in simple terms do not relate to the businesses like liquor, banned by the Islamic laws.

He claimed that 71 stocks in BSE 100 and 366 stocks in BSE 500 are Shariat-compliant. Gupta said the product is likely to attract more non-muslims than muslims since the concept is quite business-like.

Since interest income is banned under Shariat laws, Taurus would give quarterly disclosure of income to subscribers, breaking them up into interest income and capital appreciation. — PTI

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Gulf Oil buys Petromin for $200 m

Dubai, November 18
Gulf Oil International, part of Hinduja Group and Dabbagh Group of Saudi Arabia, have bought Petromin, a joint venture between Saudi Aramco and Mobil Investments, for $200 million.

The buying underlines growing inflow of capital from India to the Kingdom's energy sector.

Petromin takeover by Gulf Oil International represents a significant trend in the oil sector that not only underlines growing investment in the Saudi downstream oil industry, said the Arab News.

Petromin, the largest manufacturer of lubricants in the Kingdom, exports to over 20 countries. Prior to the takeover, it was a joint venture between Saudi Aramco (71 per cent) and Mobil Investments (29 per cent), an affiliate of Exxon Mobil, with an annual sale of 80,000 metric tonnes and an annual turnover of over $200 million. — PTI

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Future Group targets Rs 30,000-cr revenue

Mumbai, November 18
At a time when some big retailers are facing opposition from small traders, Kishore Biyani-led Future Group has said its expansion plans are on track and it hopes to meet the revenue target of Rs 30,000 crore by 2010.

Future Group's CEO, innovation and incubation, Damodar Mall said the group plans to set up more fair price shops, Big Bazaar and Food Bazaar outlets across the country and is not facing opposition from local neighbourhood stores.

The number of Big Bazaar stores would be increased to 250 across 25 cities over the next three years from 76 stores across 14 cities. The company targets to roll out 600-800 Food Bazaars in the same time span in around 25 cities, he said.

At present, the Food Bazaar has 108 outlets. — PTI

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Caparo enters US market

London, November 18
NRI industrialist Lord Swraj Paul-led Caparo Group has entered the North American vehicle market with the creation of Caparo Vehicle Components Inc and the acquisition of the assets of a Michigan-based firm.

"The growth of Caparo Vehicle Products (CVP) is a result of Caparo's now global reputation for service and quality, good management and optimised sourcing of local capabilities.

The development of Caparo Vehicle Components Inc (CVCI) is a strategically important step for CVP as its first venture in North America," Caparo Group's CEO Angad Paul said today. — PTI

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Market Update
Bourses again in bullish zone
by Lalit Batra

Despite sub prime woes that continue to plague the US, Indian markets continued their winning streak, as Sensex gained 4.2 per cent for the week at close at 19,698 and Nifty gained 4.3 per cent to close at 5,906. Markets also shrugged off the disappointing industrial production data for September 2007.

With the government getting breathing space on the nuke deal (left seemingly softened its stand) and renewed buying by the foreign investors, markets may open strong during the initial part of this week, though Indian markets will continue to move largely in sync with the world markets.

Edelweiss Capital

Edelweiss Capital is a financial services company, offering a wide range of financial products and services targeted at retail investors, high net worth individuals and corporate and institutional clients. Edelweiss has research coverage on approximately 190 companies, which represent approximately 69 per cent of the market capitalisation of all companies listed on the BSE at the end of July 2007. The company has divided its business into capital and advisory segments based on the nature of the stream of revenues derived from these. With the evolution of the Indian capital markets, the broking industry has undergone rapid consolidation driven by increased trading volumes, improved regulation, customer sophistication, availability of better technology and increased back-office requirements. As a result, significant changes have been introduced to strengthen risk management systems. Changes in the regulatory framework and settlement mechanics have resulted in smaller operating players losing market share, leading to consolidation in the industry. Market consolidation is ever more pronounced in the online trading category where the top five brokers control a very significant share in the market. The rapid growth in online trading volumes can be attributed to the growing sophistication of retail investors, availability of reliable Internet connectivity and the sophistication of the Internet trading products. Players like Edelweiss who are increasing their share of the online broking space are well equipped to benefit with the evolution and consolidation in the Indian capital market. Edelweiss’s attempt to geographically diversify its branch franchise across the country is expected to facilitate it to access and cross-sell its products, including wealth management and insurance brokerage, that the company sees having latent demand for. Further, the fact that nearly 40 per cent of the company’s revenues are derived from its capital (proprietory) business alone reduces the dependence on client volumes. The company also continues to outperform the industry’s average rate of growth.

The risk associated with the company is that it derives a significant portion of its revenues from equity broking (58 per cent) for both retail and institutional clients. Accordingly, its revenues and profitability are dependent on favorable capital market conditions. The company’s intended foray into wholesale lending is also fraught with risk. I am of the view that players in the Indian financial services space (brokerage houses) can offer value to their shareholders in the longer term by evolving their business models in a diversified manner and in line with their global peers, the current models though stand widely exposed to the risks of market dynamics.

Given the above facts and that the Edelwiess issue is stiffly priced at upper band (Rs 725- Rs 825), the issue carries risk in the short run. Therefore, investors with an appetite for risk may apply at the upper band. The issue closes this Tuesday.

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Tax Advice
No tax on GPF withdrawals
by S.C. Vasudeva

Q. I have following queries:

I Is GPF deposited under Section 80-C free from income tax when withdrawn subsequently as the withdrawal from GPF is quite easy? If so, up to how much permissible period after its deposit?

II What is the full form of 'EEE' and 'EET'?

III Whether 'EET' regime has been announced by the finance minister and it is applicable in current financial Bill (2007-08).

— Baldev Singh Thakur, HP

A. The answers to your queries are as under:

I The entire amount of GPF as and when received would be exempt from tax. The permissible period would depend upon the GPF Rules.

II The full form of 'EEE' is Exempt Exempt Exempt and that of 'EET' is Exempt Exempt Taxed.

III The 'EET' regime is yet to be made applicable. It is not applicable for the current financial year i.e. financial year ending 31st March 2008.

Rebate u/s 80 U

Q. I am a retired government servant. I have been diagnosed as a case of acquired sensori neural loss (hearing loss) by Members Disability Board, G.M.C. Hospital, Sector 32, Chandigarh, and issued a certificate with permanently disabled by 62 per cent with respect to ears.

Can I qualify as a 'handicapped' under 80U of I.T. as I cannot hear? And if so can I claim relief under the Act and how much?

— Gurmeet, Chandigarh

A. In accordance with the provisions of Section 80U of the Income-tax Act 1961 (the Act), in computing the total income of a resident individual who at any time during the previous year is certified by the medical authority to be a person with disability, there shall be allowed a deduction of Rs 50,000/-. In case of severe disability the deduction allowable is Rs 75,000/-. The term medical authority has been defined by the Act as medical authority referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act 1995. The term disability as defined in clause (i) of section 2 of the above referred Act includes hearing disability which should be a loss of 60 decibels or more in a better ear in the conversational range of frequencies. The term medical authority means any hospital or institution specified for the purposes of aforesaid Act by notification by the appropriate Government.

You may, therefore, ascertain whether G.M.C. Hospital, Chandigarh is a prescribed medical authority and further that the hearing disability is within the range as specified above. In case you are covered within the above provisions, you can claim the deduction of the amount referred to above. For claiming such deduction, you will have to enclose a copy of the certificate issued by the medical authority in the form and manner prescribed vide Rule 11A of the Income Tax Rules 1962 (Form No. 10-IA) along with return of income under Section 139 of the Act in respect of the assessment year for which the deduction is claimed.

Interest on KVPs

Q. I retired from service on 28.02.2007 and want to enquire:

(i) The year-wise interest rates for Kisan Vikas Patra purchased on 21.05.2007.

(ii) Whether the interest of 400 days bank deposit or Rs 6 lakh scattered in two financial years 2007-08 and 2008-09 is to be adopted as calculated by compounding quarterly and will require rectification by concerned bank or not.

(iii) Type of supporting papers for filing the return in addition to TDS certificates and trading account statement for income from bank deposits (fixed and saving), CPF interest after 2/07, income from equity trading, house rent and post office savings (Monthly Income & Kisan Vikas Patra).

— Sajjan Singh, Ludhiana

A. The answers to your queries are as under:

(i) The interest accrued on investment in Kisan Vikas Patras is to be computed in accordance with the interest table issued by the Department of Economic Affairs. The interest rate applicable for KVPs purchased on or after 01.03.2003 are given hereunder in respect of KVP of the denomination of Rs 1,000.

Period from the date of Rate of Maturity

certificate to the date of interest value

its encashment

1 year 6.40 1065.02

2 years 6.40 1134.28

2 years and 6 months 6.40 1170.51

3 years 6.40 1207.95

3 years and 6 months 6.88 1267.19

4 years 6.88 1310.80

4 years and 6 months 6.88 1355.90

5 years 7.36 1435.63

5 years and 6 months 7.36 1488.49

6 years 7.36 1543.30

6 years and 6 months 7.85 1649.13

7 years 7.85 1713.82

7 years and 6 months 7.85 1781.06

8 years 7.85 1850.93

8 years and 7 months -- 2000.00

(ii) The interest on fixed deposits which are repayable after a fixed period is normally compounded at quarterly rests. It would be advisable to obtain a certificate from bank for the interest accrued up to 31st March every year.

(iii) According to the latest requirements, income tax return is not to be accompanied by any document. However, all these documents should be kept in record so that these can be produced if so required by the Assessing Officer. Apart from the documents listed by you, it would be essential to keep your bank statements handy so as to explain the nature of credits/deposits appearing in the bank account. You should also preserve the supporting evidence for income from equity trading, house rent agreement and certificate from bank and Post Office for interest earned. 

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