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Nooyi bats for Tatas
Cautions on global inflation rates
Indra NooyiChennai, December 22
Food and beverages major PepsiCo’s high profile chairman and CEO Indra Nooyi, while being bullish on the beverages segment in India, sounded cautious on global inflation rates saying the rising grain prices is a major challenge for her company.       
Indra Nooyi

11th Plan seeks resource mobilisation
Kolkata, December 22
The 11th Plan, approved by the National Development Council on Wednesday, assumes that substantial resources would be generated by private and public sectors on their own without budgetary support from the Centre, external affairs minister Pranab Mukherjee said today.

UB gets global rights for Dalmore
Bangalore, December 22
Liquor major UB group has acquired the US distribution rights for Dalmore Single Malt. With this, the group now has worldwide rights for the brand Dalmore.

NTPC inks $380-m loan pact
New Delhi, December 22
NTPC Ltd today said it has signed a $380 million (about Rs 1,495 crore) loan agreement with Japan Bank for International Co-operation (JBIC) to part finance its 1,980-MW Barh Super Thermal Power Project in Bihar.


EARLIER STORIES

 
Actress Simone Singh with CEO and managing director of Chateau wines Ranjit Dhuru at the launch of a range of wines from Chateau D’Ori in Mumbai on Friday.
Actress Simone Singh with CEO and managing director of Chateau wines Ranjit Dhuru at the launch of a range of wines from Chateau D’Ori in Mumbai on Friday. — PTI photo

Reliance Capital arm invests in US firm
New Delhi, December 22
Anil Ambani group firm Reliance Capital today said its subsidiary has invested in US-based telecom solution provider Stoke Inc.

World Bank loan encourages Bihar govt
Patna, December 22
The decision by the World Bank to approve a Rs 800-crore loan to the Bihar government is being viewed in concerned circle here as an acknowledgement of the ongoing initiatives by Chief Minister Nitish Kumar to bring fiscal reforms in this poorest state during last two years of the NDA rule.

Aviation Notes
by K.R. Wadhwaney
Authorities lack practicality
In highly intricate and complex field of civil aviation, authorities worldwide first re-enforce infrastructure, like runways, aerobridges and parking bays, before initiating expansion of flight operations.

Investor Guidance
by A.N. Shanbhag
NRIs cannot open PPF account
Q: My wife and me have NRI status and I am out of India for the last four years. I have following queries.

SBI branch at Jhajjar
Chandigarh, December 22
The State Bank of India has opened its 142nd branch of Haryana module at Jhajjar. It was inaugurated by MP Deepender Singh Hooda. G.D.S Banga, deputy general manager, State Bank of India (Haryana module), was present on the occasion.
— TNS

 

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Nooyi bats for Tatas
Cautions on global inflation rates

Chennai, December 22
Food and beverages major PepsiCo’s high profile chairman and CEO Indra Nooyi, while being bullish on the beverages segment in India, sounded cautious on global inflation rates saying the rising grain prices is a major challenge for her company.

When asked, Chennai-born Nooyi lend her support to Tata Group’s bid for Ford’s marquee brands — Jaguar and Land Rover.

On PepsiCo’s plans, she said the company plans to triple its beverage business in the next five years. “There are huge opportunities in the beverages segment. We are looking at expanding our portfolio of drinks that will cater to people of all ages.” The company plans to launch a slew of products in the segment next year and also the one that caters to hydration and overweight segments.

The chairman and CEO said Pepsico wanted to replicate its citrus cultivation in Punjab and other states, which would not only make oranges available throughout the year but will also help India reduce citrus fruits imports.

Pepsi also wanted to extend this concept to other product lines like corn. “This adds value to our products and also to the farmers,” she said.

The CEO of the $35-billion company said while “India is on a high”, infrastructure was crumbling and education system in the country needs attention.

"The education system needs to be revamped, expanded in scope and size and quality has to be improved," she said.

Nooyi, who was was visiting the PepsiCo-Exnora Waste Management Centre at Pammal near Chennai, had recently bought a flat for about Rs 4 crore at Poes Garden, where she has former Chief Minister Jayalalithaa and superstar Rajnikanth as her neighbours.

Nooyi said partnerships like the PepsiCo-Exnora Waste management project can help the country. "Garbage management is very important for us. It is very good for the country," she said.

The company has tied up with Exnora International to scale up the model of waste management. She said the company had identified three areas to focus on as part of its environment sustainability efforts — converting waste to wealth and make the cities cleaner and healthier, replenishing the precious resource of water and partnering with farmers to help them earn more. — PTI

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11th Plan seeks resource mobilisation

Kolkata, December 22
The 11th Plan, approved by the National Development Council on Wednesday, assumes that substantial resources would be generated by private and public sectors on their own without budgetary support from the Centre, external affairs minister Pranab Mukherjee said today.

This was because "substantial chunk of budgetary support has been diverted to social infrastructure," Mukherjee said at a seminar here.

"For example, the budgetary support in education had been hiked from 7 per cent to 19 per cent and double in the health sector," he said.

He pointed that for the high growth rate of above 9 per cent in the 11th Plan period, a lot of investment was required in various fields with power being one of them.

Speaking about the energy security, he said the country was looking at nuclear energy as one of the alternate sources.

India has to look at its strength and weakness, he said emphasising upon becoming efficient. Cost effectiveness should be the yardstick in an era of globalisation, he added.

The minister said one should keep sector-wise data on employment and contribution to GDP in mind. — PTI

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UB gets global rights for Dalmore

Bangalore, December 22
Liquor major UB group has acquired the US distribution rights for Dalmore Single Malt. With this, the group now has worldwide rights for the brand Dalmore.

“The transaction is a win-win one for the UB Group and Beam Global Spirits and Wine,” a UB press release said today.

Dalmore is a part of scotch maker Whyte and Mackay’s portfolio but Jim Beam, part of Fortune Brands, had controlled the distribution rights for the US market through a licensing deal.

UB Breweries (holdings)’ chairman Vijay Mallya, who acquired Whyte and Mackay, earlier this year had initiated talks with Jim Beam to buyback the US distribution rights.

Dalmore Single Malt is rolling out its new luxury range globally and with this transaction, it would consolidate its position in the USA, which is the world’s largest single malt market. It is the largest market for the brand and with the control on distribution rights and access to liquid from Whyte and Mackay, UB would be in position to to further invest in the market, it said. — PTI

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NTPC inks $380-m loan pact

New Delhi, December 22
NTPC Ltd today said it has signed a $380 million (about Rs 1,495 crore) loan agreement with Japan Bank for International Co-operation (JBIC) to part finance its 1,980-MW Barh Super Thermal Power Project in Bihar.

“NTPC concluded a $380 million loan facility under the (JBIC) guarantee to part finance the 1,980MW (3x660MW) Barh super thermal power project (stage-I) in Bihar,” the company said in a statement.

The loan agreement was signed on Thursday at Tokyo by NTPC director (finance) A.K Singhal.

“The facility, which was arranged and guaranteed by JBIC, has floating interest rate linked to the LIBOR and door-to-door maturity of 18 years. This is the first facility extended by the JBIC to NTPC without sovereign guarantee,” it said.

JBIC has previously provided financing for Gandhar, Simhadri, Faridabad and North Karanpura power projects for an aggregate amount of 172 billion Japanese yen through its overseas development assistance programme.

NTPC has an installed capacity of 28,644 MW and generates about 28 per cent of power produced in the country. — PTI

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Reliance Capital arm invests in US firm

New Delhi, December 22
Anil Ambani group firm Reliance Capital today said its subsidiary has invested in US-based telecom solution provider Stoke Inc.

However, financial details of the investment made by ADAG’s corporate venture arm Reliance Technology Ventures (RTVL) was not disclosed. The US-based firm enables telecom operators to solve security services problems across different broadband access.

The co-investors, along with RTVL, in the deal include existing investors such as US-based venture capital funds Kleiner Perkins Caufield & Byers, Sequoia Capital, Integral Capital Partners and DAG Ventures, a company release said.

“Stokes Technology provides highly versatile and innovative solutions specifically engineered to help operators realise the economic benefits and competitive advantages of network convergence," RTVL CEO Harshal J Shah said.

RTVL has advised and invested in deals aggregating to over $1 billion. This is the second investment of RTVL in the US telecom space. — PTI

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World Bank loan encourages Bihar govt
Tribune News Service

Patna, December 22
The decision by the World Bank to approve a Rs 800-crore loan to the Bihar government is being viewed in concerned circle here as an acknowledgement of the ongoing initiatives by Chief Minister Nitish Kumar to bring fiscal reforms in this poorest state during last two years of the NDA rule.

It is the first Bihar development policy loan by the World Bank. The Bihar government has already received communication from country director, World Bank (India), Isabel Gurrero, stating the bank’s decision to release the loan to boost the state’s present quest for progress and development.

Deputy Chief Minister, in-charge of finance portfolio and a key architect behind the ongoing economic and administrative reforms in the state, Sushil Modi said the loan was primarily meant to bring improvement in fiscal policy, public financial management, road building and governance.

Sanctioning the loan, the World Bank observed that while India has emerged as one of the fastest-growing countries in the world, Bihar was still the poorest state in the country with about 39 per cent people living below the poverty line.

Going by official records with 8.5 per cent of India`s population, Bihar had recorded only 4 per cent economic growth in recent years, which was slower than the rest of India.

The views expressed the Bank was earlier echoed by former President APJ Abdul Kalam too.

Modi hoped that the loan, focusing on accelerating growth and improving public service delivery, would help the state achieve development goals set out in its 11th Plan.

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Aviation Notes
by K.R. Wadhwaney
Authorities lack practicality

In highly intricate and complex field of civil aviation, authorities worldwide first re-enforce infrastructure, like runways, aerobridges and parking bays, before initiating expansion of flight operations.

Airport planners and designers are of the opinion that this is the only way to promote flying, cater to passengers convenience and improve welfare of airlines and other users.

Unfortunately, in our country, the civil aviation authorities have their own peculiar ideas, which are devoid of practicality and wisdom. They do wrong things at wrong times. Instead of developing infrastructure at all airports, particularly at two busy international airports at Delhi and Mumbai, they are increasing operations. The mushroom growth of flight operations on national and international routes have been the cause for increase in incidents of possibility of mid-air collision and blockage of runway, as it happend at Mumbai’s only runway on December 19. Indian’s infamous hydraulic failure led to blockage at the runway.

Commanders, co-pilots, engineers, technicians and cabin crews are of the opinion that it was a blunder to have allowed simultaneous operations of two runways -main and subsidiary- at the Indira Gandhi International Airport (IGIA). As two runways converge at particular point, there is always a possibility of collision when two aircraft take-off within 15 seconds of each other. In less than eight months, there have been as many as five near-miss instances at the IGIA.

The problem gets further compounded as there is an acute shortage of trained and qualified air traffic controllers (ATCs) at the IGIA. There are radar problems also.

The ATCs are made to over-work and there have been occasions when they have been short on sleep. This is in violation of the rules of the International Civil Aviation Organisation.

Following incidents of near-miss at the IGIA, the authorities have withdrawn their hasty decision of simultaneous flying from two runways. They have made one runway for taking-off and other for landing. “This is what should have been from the beginning,” said two senior commanders.

According to pilots, the authorities should with-hold additional flying operations and keep licences for new airlines in abeyance until infrastructure is ready to cope up with additional flights.

Amidst scenario of confusion and chaos, the authorities, in another hasty decision, have shifted parking from around terminal IB to terminal IA. This is causing acute problems to users, particularly female staff engaged in night shifts. It is unsafe for them to walk about one kilometer to and from terminal IB to IA at nights.

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Investor Guidance
by A.N. Shanbhag

NRIs cannot open PPF account

Q: My wife and me have NRI status and I am out of India for the last four years. I have following queries:

Is any income received in India in the form of rent or dividends taxable?

As an NRI, can I open a PPF account in India? My wife had a PPF account in India before she acquired the NRI status. Can she deposit money in that account?

— Saigal

A: 1. Income earned in India is exigible to tax in India. In your case, if the rent, along with other taxable income is less than the tax threshold of Rs 1.1 lakh, you will be in zero tax zone. Dividends from shares are tax-free in the hands of the investor.

2. NRIs are prohibited from opening a PPF account or investing in any of the post office schemes as well as the RBI savings bonds. However, if a resident, who subsequently becomes NRI during the currency of its term, or an NRI, who has opened the account before the date of this notification (GSR 585(E) dated July 25, 2003, may continue to subscribe till maturity on a non-repatriation basis. This means, they cannot open a new account or extend the scheme beyond its maturity.

Gift to parents

Q: I am a BPO employee. My query is:

1) Can you confirm whether money gifted to retired parents (both senior citizens) is exempted under Section 56 of the Income Tax Act, 1961, because tax treatment for such cases varies from company to company?

2) Please also confirm if security transaction tax (STT) paid by me on purchase of shares is eligible for tax exemption under Section 88E.

— S. Julka

A: Money gifted to parents is tax-free for both donor and receiver as per Section 56. This cannot change from company to company as this is the law. However, I hope you aren’t confusing it with the gift being tax deductible. The gift is not tax deductible. In fact, it has to (will be) made out of your after tax income. It is the transaction of gift that is tax-free and has no tax incidence.

STT is not eligible for tax exemption but is tax deductible from the tax on profits from your securities transaction. But for this you will have to classify yourself as a trader in securities and hence be taxed at slab rates applicable. This means long term tax exemption and short term tax at the rate of 10 per cent will not be available.

Short-term capital gains

Q: I have been applying for many good IPO shares and selling these immediately after allotment. I have been earning short-term gains of around Rs 1.7 lakh. My other income, chargeable to tax, is expected to be around Rs 80,000. I have contributed Rs 1 lakh to avenues covered by Section 80C.

I feel that my total taxable income should be Rs 2,50,000 and after claiming the deduction under Section 80C, the income chargeable to tax should be Rs 1,50,000. Since I am a female, I am eligible to the threshold of Rs 1,45,000 and, therefore, have to pay tax only on Rs 5,000, and that too at the concessional tax rate of 10.3 per cent.

My accountant, who files my tax returns, claims that the short-term capital gains from sale of shares do not attract the benefit of Section 80C and, therefore, I will have to pay tax on the entire short-term capital gains at the rate of 10.3 per cent on Rs 1,70,000. This works out at Rs 17,510. If this is true, suggest some strategy to enable me reduce this heavy tax burden.

— Inderjeet

A: Your accountant has rightly observed that under Section 111A, the benefit of your contribution of Rs 1 lakh is available only on your normal income, which is Rs 80,000. It is not available on short-term capital gains. Therefore, your normal income becomes nil. The extra Rs 20,000 contributed by you does not attract any tax concessions. Therefore, the short-term capital gains are fully exigible to tax. So far he is right. The amount on which you have to pay tax is another story.

As observed by you, benefit of the tax threshold of Rs 1,45,000 is available even on short-term capital gains. Since your normal income has become nil, thanks to your contribution of Rs 80,000 to avenues under Section 80C (the extra Rs 20,000 was not necessary), short-term gains on which you have to pay tax is Rs 25,000 (=1,70,000 - 1,45,000). The tax payable is Rs 2,575.

There is no strategy you can adopt to save or reduce this tax. Yes, you can earn short-term loss from shares of equity-based MF schemes and this can be setoff against the short-term capital gains.

Incidentally, any short-term gain or loss you earn from any other source is treated as your normal income and attracts, if it is a gain, benefit of Section 80C and if it is a loss, the benefit of setoff. The benefit of the threshold is available in both the cases.

US citizenship

Q: My mother was a Kerala state employee and took leave for seven years and came to USA. Now, she has taken US citizenship. For her to be eligible for pension from India, she will have to put in three more months of work and for that she would have to go back to India. Can she go back and work as a state employee in Kerala even after getting US citizenship?

— Sachin

A: There are many persons of Indian origin or even foreigners, who are working in India. S7he will have no problem unless the Kerala State Employment Rules prohibit such an employment. She can get the overseas citizenship of India card to bypass the problem, if any.

The authors may be contacted at wonderlandconsultants@yahoo.com 

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