SPECIAL COVERAGE
CHANDIGARH

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DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

B U S I N E S S

Spectrum fee hike unlikely
New Delhi, December 16
The Department of Telecom is unlikely to increase the spectrum fee beyond the prescribed Rs 1,651 crore for an all-India licence as it feels mobile tariffs could go up if operators have to pay higher charges.

Singapore beckons Punjabi investors
Chandigarh, December 16
If Dubai has become the favourite investment hub for the multi-millionaire Punjabis, Singapore beckons the left overs, the millionaires.

Software export from Punjab, Chandigarh looking up: ESC
New Delhi, December 16
The southern region is far ahead of the northern region in export performance in computer software and services, but of late exports from states like Punjab, Uttaranchal and Union Territory of Chandigarh are picking up, according to Electronics and Computer Software Export Promotion Council.

Laptop market grows 85 pc
Chennai, December 16
The laptop computer market in India grew by 84.8 per cent in the third quarter of 2007 compared to the year-ago period, contributing significantly to the overall PC market growth of 25.1 per cent.

Ficci for greater access to Korean services market
New Delhi, December 16
On the eve of ninth round of India-Korea Comprehensive Economic Partnership Agreement (CEPA) negotiations, industry chamber Ficci has urged New Delhi to push for greater market access for its professionals and service-providers in the Korean services market.

Multi-purpose charger from Delta
New Delhi, December 16
Delta India Group, part of $4.2-billion Delta Group, has launched in India world’s smallest universal adaptor to charge several types of devices, including laptop, ipod, mobile phones and gaming consoles.

Actor John Abraham and actress Malaika Arora Khan at the Gladrags Mrs India Contest 2008 in Mumbai late on Saturday.
Actor John Abraham and actress Malaika Arora Khan at the Gladrags Mrs India Contest 2008 in Mumbai late on Saturday. — PTI

EARLIER STORIES

 

Tax Advice
No wealth tax liability on bank FD
Q. Is fixed deposit in bank a wealth tax liability?

Market Update
Mid & small cap rally may continue
Markets gained ground during the early part of the last week as both, Sensex and Nifty, hit lifetime highs.

Videos
Maruti’s diesel range.
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Deccan to introduce biz class.
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Spectrum fee hike unlikely

New Delhi, December 16
The Department of Telecom (DoT) is unlikely to increase the spectrum fee beyond the prescribed Rs 1,651 crore for an all-India licence as it feels mobile tariffs could go up if operators have to pay higher charges.

The government had kept the fee for an all-India licence at Rs 1,651 crore, which comes bundled with start-up spectrum, so that operators could roll out services faster and at affordable prices. This objective has not been accomplished as most of the rural areas are yet to be connected, a senior official in DoT said.

The entry fee was finalised for Unified Access Service (UAS) regime in 2003 based on the decision of the Cabinet. At this price, several licences were issued 11 months ago to various firms, including some existing GSM service providers.

A section of operators has been demanding increase in spectrum fee. Any increase, either fixed or through auction of spectrum, may favour existing GSM players and thus would not stand legal scrutiny, the Department feels.

Communications minister A Raja had also last week ruled out auctioning spectrum for second generation network.

On the issue of dual technology licence like the one issued to Reliance Communications, telecom secretary D S Mathur has written to finance secretary D Subbarao clarifying that decision with regard to its fee has been taken based on regulator TRAI's recommendations.

As far as government revenues are concerned, the DoT said the contribution to the exchequer in 2006-07 stood at Rs 25,000 crore and it is estimated to go up to Rs 50,000 crore in 2010.

Revenues are generated by way of license fee, spectrum charges and service taxes, DoT said in a presentation to the Parliamentary Standing Committee last week. Annual spectrum revenue has also increased from Rs 25 crore in 1997-98 to more than Rs 2,000 crore in 2006-07, DoT said. — PTI

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Singapore beckons Punjabi investors
Prabhjot Singh
Tribune News Service

Chandigarh, December 16
If Dubai has become the favourite investment hub for the multi-millionaire Punjabis, Singapore beckons the left overs, the millionaires. Last year, of the total foreign investors in real estate in Singapore, Indians were third with 10 per cent of total investment to their credit. Ahead of Indians were Chinese and Indonesians.

“In the coming year, we hope and expect more and more Indians to invest in real estate in Singapore where Federal laws promise to secure their investment,” says Lee B. Lee of Far Eastern Organisation.

One of the reasons for Singapore to become a favoured destination for investors is its law. “There is no tax on capital gain and no bar on taking in or taking out any money from the country.”

The Singapore law also wants investment in each project to be handled separately and the costs on infrastructure development, including housing and commercial property, are also regulated and controlled. Developers have to follow the deadlines religiously. Most of the developers even offer one-year rental return on properties, besides promising 15 to 20 per cent return on their investments.

The Far East Organisation, in association with the Millionaire Asia and Uniquely Singapore, and a few other organisations, organised a summit of city’s millionaires here last night to woo investors.

“Singapore is a country for the rich and the affluent,” holds Lee. Probably that is the reason why they chose Chandigarh as a venue for the summit. Incidentally, Chandigarh has the highest per capita income in the country.

Though Punjab figures much lower in the per capita income list, yet Singapore companies expect more and more investors from this border state to make investments in Singapore.

“Punjabis by nature are extrovert and adventurous and have made many countries their home. Singapore has been getting lot of new migrants every year,” adds Ms Lee.

Even tourist traffic from Punjab and Chandigarh to Singapore has been witnessing 12 to15 per cent increase every year, reveals Siew-Kheng Kang, regional director, Singapore Tourism Board.

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Software export from Punjab, Chandigarh looking up: ESC
S. Satyanarayanan
Tribune News Service

New Delhi, December 16
The southern region is far ahead of the northern region in export performance in computer software and services, but of late exports from states like Punjab, Uttaranchal and Union Territory of Chandigarh are picking up, according to Electronics and Computer Software Export Promotion Council (ESC).

“ESC is closely looking at evolving strategies for promoting IT and services exports from states like Punjab, Uttaranchal, Madhya Pradesh, Rajasthan and Chandigarh in the northern region, from where IT exports are insignificant, but of late picking up,” executive director of ESC D K Sareen said.

The southern region accounts for 61.23 per cent of the total export of computer software and services during 2006-07, which is a shade lower than the percentage share clocked at 62.73 per cent, according to estimates made by the ESC.

The share of northern region in the total export of software and services has decelerated from 17.93 per cent in 2005-06 to 15.82 per cent in 2006-07. In absolute terms, export from the northern region is estimated to have gone up from Rs 18,828 crore in 2005-06 to Rs 23,104 crore in 2006-07.

Major states in the northern region that contributed to the export are Haryana (6.36 per cent), Uttar Pradesh (5.88 per cent) and Delhi (2.84 per cent).

“Karnataka continues to be at the top in terms of its contribution to the total exports at 33.36 per cent in 2006-07, a drop from 36.67 registered in the previous year. In absolute terms, export is estimated to have gone up to Rs 48,700 crore in 2006-07 as against Rs 38,500 crore in the previous year. Contribution of Karnataka to the total exports from the southern region has worked out at over 54 per cent,” Sareen said.

Maharashtra has upped its share significantly in the software and services exports from 16.14 per cent in 2005-06 to 19.66 per cent in 2006-07. Maharashtra’s contribution at 19.66 per cent to the national exports during 2006-07 was a significant improvement over its contribution of 16.14 per cent in 2005-06.

Maharashtra has become the second highest software and services exporting state, ahead of Tamil Nadu (14.52 per cent) and Andhra Pradesh (12.77 per cent).

The eastern region, which contributed only 2.90 per cent of the total national exports for the year 2006-07 is at the bottom rung with an estimated export of Rs 4,237 crore. West Bengal contributed the lion’s share of the exports (2.4 per cent), followed by Orissa (0.50 per cent).

“The state committees set up by the ESC at different centres are constantly interfacing with the IT entrepreneurs for setting up their production bases at these centres, which is showing some signs of improvement, but would take longer time frame to give adequate results,” Sareen observed.

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Laptop market grows 85 pc

Chennai, December 16
The laptop computer market in India grew by 84.8 per cent in the third quarter of 2007 compared to the year-ago period, contributing significantly to the overall PC market growth of 25.1 per cent.

More than five lakh notebook PCs were sold in the quarter, a study by market analyst IDC India said.

Hewlett Packard (HP) retained the top slot with a market share of 37.8 per cent, while Lenovo occupied the second position and Acer third.

Notebook PC sale in home and 'Small Office and Home Office' segments grew by 166 per cent and made up 43 per cent of the total business. The next largest contributors were enterprise and education segments.

"Portability, rather than mobility has emerged as the 'number one' driver for the sustained growth in notebook PC shipments in India," IDC India country manager Kapil Dev Singh said.

Given the choice of portability, flexibility and ease of use and narrowing of price-performance gap that once existed between portables and desktops, consumers are almost overwhelmingly inclined to buy notebook PCs, he said.

Further, laptop sales recorded an year-on-year growth of 104 per cent in the northern states of the country, followed by southern states at 80 per cent.

Meanwhile, the desktop PC shipments showed a growth of 10.9 per cent in the same quarter.

In the overall PC market also, which witnessed a sale of 18 lakh units, HP retained the top position with a market share of 21.6 per cent, followed by HCL at 12.3 per cent and Lenovo at 10.3 per cent. — PTI

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Ficci for greater access to Korean services market
Tribune News Service

New Delhi, December 16
On the eve of ninth round of India-Korea Comprehensive Economic Partnership Agreement (CEPA) negotiations, industry chamber Ficci has urged New Delhi to push for greater market access for its professionals and service-providers in the Korean services market.

“This has to be taken up with the Korean side in the CEPA negotiations beginning from December 18,” Ficci president Habil Khorakiwala said.

The chamber pointed out that in its FTA negotiations with the USA, Korea has significantly improved upon its WTO commitments in virtually all major service sectors.

Similarly, in the Asean-Korea FTA in services signed last month, Korea’s offer goes beyond its WTO obligations and is better than its offer under the current Doha negotiations.

Therefore, it would be in the interest of Indian industry to secure concessions and market access for our service-providers, which would be higher than Korea’s present level of WTO commitments, Ficci said.

Korea has a fairly well developed service sector that accounts for 52 per cent of its GDP. Korea’s import of services grew at an average annual rate of over 12 per cent in 2000-06 and stood at $70.6 billion in 2006. However, India occupies just a marginal share of this.

As regards composition of Korea’s services imports, Ficci noted that transportation and travel-related services account for 60.5 per cent of the total. Other important areas of Korea’s imports include business services and communication services.

India should aim at getting more liberal market access in Korea in service sectors such as IT and IT-enabled services, audio-visual, architecture, accountancy, construction-related engineering and the like, it said.

To facilitate the cause of Indian professionals, it is necessary that the two countries enter into mutual recognition agreements (MRAs) in several areas of professional services.

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Multi-purpose charger from Delta
Tribune News Service

New Delhi, December 16
Delta India Group, part of $4.2-billion Delta Group, has launched in India world’s smallest universal adaptor to charge several types of devices, including laptop, ipod, mobile phones and gaming consoles.

“The product named ‘Energie’, will hit the shelves in January, 2008,” according to Delta India Group managing director Dalip Sharma.

“These days professionals are travelling a lot and it is cumbersome to carry different chargers to charge laptops, mobiles, ipods, etc. Therefore, we have launched this innovative product,” Sharma told The Tribune here.

“The device can be used at home, in office, in car and in airplane, and it functions in both AC and DC inputs and is compatible to all types of notebooks, mobiles and ipods,” he said.

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Tax Advice
No wealth tax liability on bank FD
by S.C. Vasudeva

Q. Is fixed deposit in bank a wealth tax liability?

— Ramesh Sahuwala

A. Fixed deposit in a bank is not covered within the definition of the assets chargeable to the Wealth-tax Act, which are specified in Section 2(ea) of the Wealth-tax Act, 1957.

IT return

Q. I seek your advice on the following:

1. My wife is non income tax payee. My son has gifted her out of his own income, during the current financial year, an amount of Rs 4 lakh and she is getting bank interest against an FD since June, 2006.

2. Form 15 G is given by her to the bank for non-deduction of tax at source.

3. Her total income during this financial year is not likely to exceed Rs 50,000

4. In addition to this she is having a bank RDT of Rs 1,000 per month and it may mature in four years .

5. She is 62 years old and is senior citizen retired govt employee regularly filing IT returns.

6. This year she applied for and has been given PAN.

— Ramesh chander sharma, Chandigarh

A. In accordance with the provisions of the Finance Act, 2007, the maximum amount on which tax is not payable by a woman resident in India and below the age of 65 years is Rs 1,45,000. On the basis of facts given in the query, it seems your wife is not having an income above the said figure of Rs 1,45,000. In case my presumption is correct, she need not file the tax return.

I hope she has complete evidence with regard to the gift of Rs 4 lakh received from her son so as to produce the same in case of any inquiry from the Tax Department.

Rebate on tuition fee

Q. Myself and my wife are Haryana government retirees and drawing pensions from Haryana treasury. Our son is studying in M.B.A. and we are paying his fees twice a year i.e. every semester amounting to Rs 1,02,500 every semester. Can both of us claim the rebate of Rs 1,00,000 under Section 80C? We are not still senior citizens i.e. not attained the age of 65 years.

— Dr S.C. Sharma, Kurukshetra

A. On the basis of the facts given in your query, it should be possible for each one of you to claim the deduction of the tuition fee paid in respect of your son’s education. This is subject to the proposition that he is studying in India. The deduction as pointed out by you is limited to the extent of Rs 1 lakh per year.

Income tax rebate

Q. My annual income is about Rs 3 lakh. I have paid Rs 3.5 lakh for my son as tuition fee for study in Australia (hospitality management degree). Please tell me what is my income-tax exemption (rebate)?

— Sarbjit Singh, Gurdaspur

A. According to the provisions of Section 80C of the Income-tax Act, 1961, deduction is allowable in respect of tuition fee paid whether at the time of admission or thereafter to any university, college, school or other educational institution situated within India. The amount of Rs 3.5 lakh, paid as tuition fee for studying in Australia, would thus not be considered for the purposes of the allowability of deduction under Section 80C.

Recurring account

Q. I want to open a monthly recurring account in a bank in the name of my adult daughter (unmarried). I am employed but she has no source of income. The income tax return is filed by me regularly. Is the interest received on recurring deposit for a year taxable in my hands or my daughter?

— Kiran Gupta, Mohali

A. It would be advisable to treat the amount of recurring deposit as a gift to your unmarried adult daughter. In such a case, the income on the recurring deposit would be treated as her income and she will be liable to pay tax, if any thereon.

Senior citizen

Q. I retired from the Punjab State Electricity Board on February 28, 2006 after attaining the age of 58 years. I shall be completing the age of 60 years on February 28, 2008. Kindly let me know if am entitled to avail the income tax rebate under the category of senior citizens for the purpose of filing my IT return for the year 2007-08.

— Shashi K. Kapil, Panchkula

A. The status of senior citizen is a person who has completed the age of 65 years in a particular previous year. For example, if a person had attained the age of 65 years in the year ended March 2007 he will be entitled to the status of the senior citizen for tax purpose for the assessment year 2007-08. You have not attained the age of 65 years as yet and therefore not entitled to claim that status.

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Market Update
Mid & small cap rally may continue
by Lalit Batra

Markets gained ground during the early part of the last week as both, Sensex and Nifty, hit lifetime highs. But a less than anticipated, 25 basis points cut in the Fed rate upset the global markets and Indian markets also lost large part of the gains accumulated during the early part of the last week. Sensex gained 64 points to close at 20,030 and Nifty gained 73 points to close the week at 6,047.

The market may turn volatile in the coming week as the FII selling may continue in the near term as they may resort to year-end profit taking. FIIs follow calendar year as their accounting year. Off late, global markets have come under selling pressure on concerns that credit market crisis may intensify further. Any major sell-off there may cast its shadow here as well. However, small and mid-cap stocks may continue their rally on momentum buying, as indicated by strong market breadth in the past few days. Overall, the trend will continue to be sideways with all eyes on the pattern in global markets.

Meanwhile, the Government of India has reportedly allowed the Postal Life Insurance Fund (POLIF) and Rural Postal Life Insurance Fund (RPOLIF) to enter the stock markets through investments in public sector mutual funds. The union cabinet last Thursday, appointed UTI and SBI mutual funds as managers for the over Rs 10,000-crore corpus of these two funds.

Punj Lloyd

Punj Lloyd Limited (PLL) is amongst the largest engineering and construction (E&C) companies in India providing integrated design, EPC and project management services for energy and infrastructure sectors.

PLL is one of the leading pipeline contractors in Asia and has a significant presence in West Asia. The company has executed over 8,000 km of pipeline projects in all terrains and has been part of some of the important projects. The 11th five-year plan (2007-2012) put emphasis on infrastructure development with focus ranging from power to oil and gas to railways. PLL would be one of key beneficiaries of this investment in some of the areas like pipelines, power and roads. Its presence, not only in India, but also across Asia and West Asia, makes it a beneficiary of a larger market.

One of the significant achievements for Punj Lloyd Ltd (PLL) over the years has been its increasing average order size. A higher order size would improve the margins of the company and also make it a pre-qualified player for larger and more complex orders.

PLL has set up a subsidiary Punj Llyod Upstream Ltd, which would be involved in providing onshore integrated-drilling services. Day rates for oil rigs look robust and we believe PLL to benefit from increasing market for E&P services.

Looking at the growth potential in the sector in which PLL operates, investors may buy this company’s stock on declines (current market price Rs 554) with a long-term perspective.

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