SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI


THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE
TERCENTENARY CELEBRATIONS

B U S I N E S S

3 telcos to share infrastructure
New Delhi, December 8
In a major step towards achieving the government’s vision and TRAI’s recommendations for passive infrastructure sharing, three top telecom companies namely Bharti, Idea and Vodafone Essar today announced formation of an independent tower company in India.

Govt to act tough against defunct units
Chandigarh, December 8
In the wake of "pro-industry" initiatives taken by the Congress-led UPA government, India has emerged as a better place to do business as the improved rankings in a recent World Bank report has put India at 119 as against 154 two years ago, union minister for corporate affairs Prem Chand Gupta claimed here today.

Prem Chand Gupta
Prem Chand Gupta

Corporates keen to take over sick sugar mills
New Delhi, December 8

Corporate giants Reliance Industries, United Spirits, Tata Chemicals and state-run Indian Oil Corp are among the 35 companies that have evinced preliminary interest in taking over sick sugar mills in Bihar.


EARLIER STORIES

 

SBI associate banks’ strike on Jan 3
Chandigarh, December 8
Devinder Singh, who has been elected president of the All India State Bank of Patiala Employees Federation, said today that they were opposed to the merger of associate banks with the State Bank of India and would intensify their agitation
in January.

Kinetic unveils ‘Flyte’
Chandigarh, December 8
Kinetic Motors today launched “Flyte”, a two-wheeler manufactured in collaboration with Taiwan-based automotive giant SYM.

Aviation Notes
Safety norms being compromised

All three vital aviation areas — international airports, commanders/pilots and ATCs (air traffic controllers) — are besieged with multiple problems and intricate internal feuds. If no major incident/accident has not taken place, it is not because of men in command but because of providence and sturdy machines.

Investor Guidance
Dividends from mutual funds tax-free

Q : I studied the analysis given by you about the Growth & dividend reinvestment options of mutual funds.

Videos
India’s billionaire boom.
(56k)
GDP booms at 9.1%.
(56k)

 

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3 telcos to share infrastructure
Tribune News Service

New Delhi, December 8
In a major step towards achieving the government’s vision and TRAI’s recommendations for passive infrastructure sharing, three top telecom companies namely Bharti, Idea and Vodafone Essar today announced formation of an independent tower company in India.

The new independent tower company, Indus Towers, would provide passive infrastructure services in India to all operators on a non-discriminatory basis, the three companies in a joint press statement said today.

The formation of the new tower company is in line with the infrastructure sharing MoU signed between Bharti and Vodafone in February, 2007.

The three companies will merge their existing passive infrastructure assets in 16 telecom circles in India. Bharti and Vodafone Essar will own approximately 42 per cent stake each and Idea will own the remaining 16 per cent stake in Indus Towers. New passive infrastructure rollouts in the 16 circles will be undertaken by Indus Towers.

The primary benefit will be the accelerated expansion of coverage, especially into rural areas, and enabling wider access to affordable services for all, helping to meet the government’s teledensity targets, it said, adding Indus Towers welcomes all operators to become customers.

While these operators will continue to run their active infrastructure completely independently, they will be able to enjoy capex and opex savings, enhanced operational efficiency and quicker expansion of coverage, it said.

Indus Towers will be an independently managed company, offering services to all telecom operators and other wireless service providers such as broadcasters and broadband service providers.

Indus Towers will have approximately 70,000 sites at inception providing it with significant scale benefits, and will undertake a significant rollout of telecom infrastructure to propel the mobile sector towards achieving India’s teledensity and rural coverage goals within the next few years, it said.

The formation of Indus Towers will enable telecom operators to reduce operating costs through economies of scale. The Indian consumer will be the ultimate beneficiary of this initiative through improved network quality and broader coverage, especially in rural areas, it added.

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Govt to act tough against defunct units
Pradeep Sharma
Tribune News Service

Chandigarh, December 8
In the wake of "pro-industry" initiatives taken by the Congress-led UPA government, India has emerged as a better place to do business as the improved rankings in a recent World Bank report has put India at 119 as against 154 two years ago, union minister for corporate affairs Prem Chand Gupta claimed here today.

Addressing a select gathering after laying the foundation stone of corporate bhawan here, Gupta claimed that the reform process initiated by the government was aimed at providing a level-playing field to the corporate sector with the government acting only as a regulator.

Under an ambitious programme, MCA-21, introduced by the ministry, the regional offices of the registrar of companies were being upgraded, Gupta said. Besides, over 5 crore files have been digitalised in a bid to streamline the functioning of the registrar of companies.

In a warning that may spell trouble for "defunct units", the minister said the government had decided to act tough against over 2.5 lakh of the 8.6 lakh registered units with registrar of companies, which had not been filing the necessary documents with the authorities concerned.

Earlier, minister of state for finance Pawan Kumar Bansal said the construction of the corporate bhawan in Chandigarh was the need of the hour as infrastructure had not kept pace with growing industries in the region.

Giving details of the project, Anurag Goel, secretary, ministry of corporate affairs, informed that the Rs 12-crore project would be completed in 18 months. Spread over an area of 4,400 square yard, the office would cater to the needs of the industrialists of Punjab, HP and Chandigarh.

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Corporates keen to take over sick sugar mills

New Delhi, December 8
Corporate giants Reliance Industries, United Spirits, Tata Chemicals and state-run Indian Oil Corp are among the 35 companies that have evinced preliminary interest in taking over sick sugar mills in Bihar.

These companies today took part in a pre-bid meeting organised here by the state government for giving 15 closed sugar mills it owns on lease to public or private players.

"The companies which participated in the discussion wanted to know the details of the Bihar government's plan to lease out 15 closed sugar mills," state's sugarcane minister Nitish Mishra said.

He said about 35 companies including Reliance, Bharti's Field Fresh, Tata Chemicals, United Spirits and public sector oil marketing companies Indian Oil, Hindustan Petroleum, and Bharat Petroleum participated in the discussion. The sugar majors who took part in the discussion include Sri Renuka Sugars, Dhampur Sugar and Upper Ganges Sugar, he added. — PTI

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SBI associate banks’ strike on Jan 3
Tribune News Service

Chandigarh, December 8
Devinder Singh, who has been elected president of the All India State Bank of Patiala Employees Federation, said today that they were opposed to the merger of associate banks with the State Bank of India and would intensify their agitation in January.

Strike would be observed on January 3 against the merger at the national level by associate banks, he added. Associate banks such as State Bank of Patiala, State Bank of Bikaner, and State Bank of Saurashtra have made a lot of contribution in the development of the region, and following their merger with the SBI, development of the respective regions would be affected, he added.

He said as many as nine organisations of the bank employees had joined hands against the merger.

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Kinetic unveils ‘Flyte’
Tribune News Service

Chandigarh, December 8
Kinetic Motors today launched “Flyte”, a two-wheeler manufactured in collaboration with Taiwan-based automotive giant SYM.

The 125cc scooter is based on SYM’s X’pro, internationally bestseller across 62 countries.

Flyte claims several first-time features in its segment, such as easy front-fuelling, 4-in-1 anti-theft magnetic key, convenient mobile charge point, crash resistant mirrors and huge (22 litres) brightly lit underseat storage.

Flyte, available in five attractive colors, is priced at Rs 37,499 and comes with a three-year warranty.

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Aviation Notes
by K.R. Wadhwaney
Safety norms being compromised

All three vital aviation areas — international airports, commanders/pilots and ATCs (air traffic controllers) — are besieged with multiple problems and intricate internal feuds. If no major incident/accident has not taken place, it is not because of men in command but because of providence and sturdy machines.

The recent statistics show an alarming rise in accidents on tarmac or around runways. One young lady official was crushed under the wheels (culprit is still at large) and a few passengers, including a Bihar government VIP, have been injured owing to reckless and unsystematic driving. The Bihar VIP is planning to file a suit against the private operator.

According to airport officials, the alarming rise in incidents is on account of mess created in renovating and upgrading the Indira Gandhi International Airport (IGIA). It is not understood why tarmac area is not cleaned of dust, rubble and other unwanted material. The stringent rules seem to be only on paper because drivers — some untrained and unqualified — do not adhere to restrictions on speed. The situation has deteriorated to such an extent that quite a few drivers are unaware of the topography of the tarmac and complex taxiways.

An acute shortage of commanders and pilots has forced airline operators and other authorities to relax rules or ignore safety norms. This is a very dangerous trend. Such compromise can lead to mid-air crash or any other serious accident.

The data shows that medically unfit pilots and technically incompetent ones have been flying. Among them are many foreign pilots and foreign-trained Indian pilots.

Many foreign pilots are not well-versed with English or Hindi and they are unable to strike proper rapport with ATCs.

According to press reports, many 60-year-old retired US pilots get a licence to fly in India, where age limit is 65. This is not all but they are not subjected to rigorous medical tests. The airlines' winks at fitness norms is shocking. Some low-cost airlines have allowed even epileptic-inflicted pilots to take command of the aircraft.

The data shows that about 700 of the 4,200 pilots are foreigners. The ministry has asked all airlines to rethink while appointing foreign pilots. "If you must, please take adequate measures that rigorous medical medical tests and other technical requirements have been fulfilled by the foreign candidates", said the directive.

According to reports, a licence is being granted by the chief flying instructor (CFI) of any flying club on the basis of payment he receives instead of qualifications. Litigation is in progress in Mumbai where particular CFI cleared 25 aspiring pilots without conducting mandatory flying checks.

There is acute shortage of trained ATCs. They are made to work violating the duty and time limit rules.

There may be a boom in aviation sector but overall picture is very hazy. The dirctorate-general of civil aviation must see that all safety norms are being adhered to.

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Investor Guidance
by A.N. Shanbhag
Dividends from mutual funds tax-free

Q : I studied the analysis given by you about the Growth & dividend reinvestment options of mutual funds.

Whether the dividend given by mutual fund is taxable income - i.e., does the investor have to pay tax on it?

— Kanti Patel

A: Dividends from mutual funds are tax-free for the investor. However, on dividends from non-equity funds there is a dividend distribution tax of 14.1625 per cent applicable that is payable directly by the mutual fund.

ELSS investment

Q: If I shift money from any given fund to a tax savings fund, will it be considered as ELSS investment and hence be eligible for tax deduction for that year?

— Panase

A: Any investment is ELSS, whether directly or switching from another scheme, will be eligible for benefit under Section 80C. However, the switch may result in short-term or long term capital gains and you may be liable for capital gains tax.

Home loan rebate

Q: In one of the queries, you have said housing loan interest up to Rs 1.5 lakh is deductible for the purpose of computing income tax.

I want to know - ‘deductible from total income or income from house property like rent’.

Similarly you have mentioned that principal amount of housing loan up to 1 lakh is deductible. For this also, I want to know - ‘deductible from total income or income from house property like rent’.

— Niranjan Das

A: Under Section 24, the interest on housing loan is first to be deducted against the income from housing property, and the balance if any can be deducted from any other income.

Under Section 80C, the total contributions subject to the limit of Rs 1 lakh to all the avenues under its umbrella can be deducted from gross total income.

The deduction under Section 80C and the interest under Section 24 are allowed only when the income from house property becomes chargeable to tax. In other words, the construction should be complete, the flat should be ready for occupation and the municipal annual value is known.

New pension scheme

Q : My son is a central government officer, who joined service in November 2006, under the new pension scheme. His DDO deducts at the rate of 10 per cent from his basic pay towards his contribution towards the new pension scheme.

While computing his gross salary for the financial year, the DDO adds the government's contribution at the rate of 10 per cent (of his basic pay) towards his income.

While considering his contributions towards long term savings, the DDO does not take into account the aforesaid contribution of the government towards his pension fund.

Is the DDO right in ignoring the above-cited amount?

— Sanghmitra

A: The DDO is apparently being constrained by the fact that the income tax authorities have not yet included this new scheme under the umbrella of Section 80C. Therefore, it cannot be considered for tax deduction. There is a possibility of it being proposed to be included in the list by the next budget.

Resident status

Q : I have been an NRI for the past three years. This year, I am coming back to India for good. Please suggest when I should return to India to avoid tax.

— Pramod Sawant

A: A resident is one who during a financial year (FY), which is from April to March, satisfies any one of the following two basic conditions :

1 He is in India for at least

a) 182 days in the FY, or

b) 365 days out of the preceding four FYs AND 60 days in the FY.

2 The stay in India need not be continuous.

Most persons going abroad for an employment for the first time will have the status of Resident since they will be covered by the ‘b’ clause above. Therefore, if an Indian citizen leaves India in any year for the purpose of employment, or as a member of the crew of an Indian ship, the 60 days in the clause ‘b’ above is to be replaced by 182 days.

In other words, they will be treated as residents only if they are in India for 182 days or more in the current FY.

A person who is not a resident is an NRI.

The forex income of an NRI is not taxable in India. In the case of a resident, the Indian income, along with the forex income, is taxable in India, whether it is sent to India or not.

To facilitate NRIs who come to India on vacation or for short trips (business or otherwise)

If an Indian citizen or a person of Indian origin, who is out of India, comes to visit, the period of ‘60 days’ is to be replaced by 182 days.

However, for those returning permanently to India, this replacement of 60 days with 182 days is not available. Consequently, those returning within four years become residents immediately on return, unless they return in February or March.

If you apply this rule, you will find that in the year of return, the requirement is of 60 days and not 182 days and therefore, your status would depend upon whether you return to India permanently on or after February 2, 2008. In other words, if you wish to maintain your NRI status even in the year in which you return, you should try and come only after February 2 and not before that.

The authors may be contacted at wonderlandconsultants@yahoo.com

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