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THE TRIBUNE SPECIALS
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TERCENTENARY CELEBRATIONS
B U S I N E S S

Bailed-out firms can’t hire H-1B visa workers
Washington, February 14
In what could be seen as a major blow to Indian IT professionals, the US Congress has prohibited banks and firms receiving federal bailout money from hiring people on H-1B visas in place of Americans laid off by them due to the economic meltdown.

US Congress okays $787 b package
In a major political victory for President Barack Obama, the US Congress has approved his $787 billion stimulus package designed to revive the battered American economy through tax cuts and creation of employment.

Budget 2009
Industry wish-list
New Delhi, February 14
In view of the slowdown and with a bid to improve the situation the following are the demand of India Inc: Confederation of Indian Industry has sought reduction in customs duty on goods such as non-coking coal, petroleum coke, non-ferrous metal scrap and melting scrap. It has also recommended that excise duty of 16 % on drugs containing alcohol and narcotic drugs should be reduced to 4%.



EARLIER STORIES




Nita Ambani, wife of Mukesh Ambani, chairman and managing director of Reliance Industries, attends US President Barack Obama’s speech to members of the Business Council on Friday at the White House.
Nita Ambani, wife of Mukesh Ambani, chairman and managing director of Reliance Industries, attends US President Barack Obama’s speech to members of the Business Council on Friday at the White House. — AP

Narayana Murthy is IT adviser to Lankan Prez
Colombo, February 14
In a bid to increase investments into the IT sector, the Sri Lankan government has appointed the chief mentor of Infosys, Narayana Murthy, as the international adviser on information technology to President Mahinda Rajapaksa.

Aviation Notes
Near-miss: Blame game is on
For the first time in the history of Indian aviation, the security of the President of India was compromised on February 9, 2009.

Investor Guidance
Lock-in period of PPF not 15 years
Q: I was planning to do some investment for my daughter on her first birthday. My husband does not want to invest more than Rs 5,000-8,000 every year. What I should invest as I did not find insurance/ULIP policies very rewarding. I don’t want to invest inequity due to the markets crashing.

 





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Bailed-out firms can’t hire H-1B visa workers

Washington, February 14
In what could be seen as a major blow to Indian IT professionals, the US Congress has prohibited banks and firms receiving federal bailout money from hiring people on H-1B visas in place of Americans laid off by them due to the economic meltdown.

The American Immigration Lawyers Association (AILA), which had earlier opposed the measure, yesterday described it as “disappointing”. It argued that this would prove to be counterproductive as it prevents the US companies to hire the best available global talent.

The H-1B has mostly benefitted Indian techies.

The measure forms part of the American Recovery and Reinvestment Act, popularly known as the Stimulus Bill. The Act finally passed by the Congress - both the House of Representative and the Senate - makes a provision of $787 billion for reviving the battered US economy.

As the banks have announced mass layoffs, the measure would effectively place a moratorium on the H-1B visa programme, Senator Bernie Sanders said in a statement.

The Independent Senator from Vermont, along with the Republican Senator from Iowa, Charles Grassley, moved such a proposal in the Senate as an amendment to the Stimulus Bill.

The measure, as finally approved by the Congress, would require the bailed-out banks to hire only Americans for two years unless they could prove they were not replacing laid-off Americans with guest workers, Sanders said.

“With thousands of financial services workers unemployed, it is absurd for banks to claim that they can’t find qualified American workers,” Sanders said.

“While we are suffering through the worst economic crisis since the Great Depression, the very least we can do is to make sure that banks receiving a taxpayer bailout are not allowed to import cheaper labour from overseas while they are throwing American workers out on the street,” he said.

In addition to banks, the Sanders-Grassley provision also restricts hiring of guest workers at any other firms that receive funds under the Troubled Asset Relief Programme or from emergency loans made by the Federal Reserve.

The bar comes even as IT firms in the US and India are demanding an increase in the H1-B visa, which is capped at 65,000 a year now.

Indians account for a majority of those with H1-B visa, issued to non-immigrant skilled workers for up to six years.

With thousands of jobs being cut by US companies almost daily over the past few months, there have been widespread apprehensions that these positions could go to low-cost foreign workers or might be outsourced to places like India.

Experts believe the Congress’ move would certainly impact hiring of H1-B visaholders, thus affecting in a big way the engagement of Indian techies in the US, but might not affect outsourcing of jobs to places like India.

About two years ago, the US had cut down the H1-B visa limit to 65,000, from 1,95,000 a year previously.

IT firms, both Indian and American, have been asking to raise the cap to allow the companies in the US greater access to the growing talent pool across the world.— PTI

US Congress okays $787 b package

In a major political victory for President Barack Obama, the US Congress has approved his $787 billion stimulus package designed to revive the battered American economy through tax cuts and creation of employment.

Obama is likely to sign the bill into law, as early as early next week.

Amid the worsening financial crisis, some 3.6 million people have lost their jobs in 13 months, of which 1.8 million have been in the last three months alone. Obama says this bill would help in creating 3.5 million jobs in the next two years and revive the US economy facing its worst crisis since the Great Depression.

Early this week, Obama spent most of his time in drumming support for the stimulus package. As the opposition Republicans put stiff resistance to its passage, Obama hit the road-addressing people in town hall meetings and even addressed a prime-time live press conference from the White House.

Addressing the members of the US corporate leadership, yesterday morning, Obama said that the plan would not only create 3.5 million jobs in next two years, but would also put people to work building wind turbines and solar panels and fuel-efficient cars. — PTI

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Budget 2009
Industry wish-list
Bhagyashree Pande/Tribune News Service

New Delhi, February 14
In view of the slowdown and with a bid to improve the situation the following are the demand of India Inc:

Confederation of Indian Industry has sought reduction in customs duty on goods such as non-coking coal, petroleum coke, non-ferrous metal scrap and melting scrap. It has also recommended that excise duty of 16 % on drugs containing alcohol and narcotic drugs should be reduced to 4%.

Federation of Indian Chambers of Commerce and Industry says exporters hit by the global slowdown hope the interim budget will extend the interest subsidy scheme to exporters beyond March 2009, when it is set to expire.

Federation of Indian Exports Organisation has demanded increase in drawback and DEPB rate by 3 to 5 per cent. Tax relief on net foreign exchange basis so as to benefit the traditional sectors of exports and an exemption from fringe benefit tax to help marketing. Interest rate subvention scheme should be extended till December 31 and should be de-linked with PLR and export credit should be provided at 7 per cent straightway for all exports sectors.

The PHD Chamber of Commerce and Industry, which represents industry groups in northern India, said corporate tax rate should be cut to 20 per cent from 30 per cent.

The Associated Chambers of Commerce and Industry has also said it wants the government to revisit corporate tax rates not only remove surcharge on it but bring it down at global average of around 26-27 per cent.

The gem and jewellery industry has sought lower interest rates, monetary relief for workers and a waiver on excise duties from the upcoming interim budget.

Textile manufacturers have sought a two-year moratorium on repayment of term loans, withdrawal of excise duties on man-made fibres and waiver of service taxes on exports and taxes on textile machinery.

Power equipment makers want lower excise duties and infrastructure status extended to include them to benefit from tax exemptions.

The hotel industry is pressing for inclusion of hotels in the infrastructure sector category, enabling easier and cheaper access to bank loans.

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Narayana Murthy is IT adviser to Lankan Prez

Colombo, February 14
In a bid to increase investments into the IT sector, the Sri Lankan government has appointed the chief mentor of Infosys, Narayana Murthy, as the international adviser on information technology to President Mahinda Rajapaksa.

“NR Narayana Murthy was appointed as the international adviser to the Sri Lankan President and he has accepted it,” Sri Lankan Foreign Secretary Palitha Kohona said.

Rajapaksa made the appointment after inviting Narayana Murthy as the chief guest to the ceremonial launch of ‘2009-Year of English and Information Technology’ at the Presidential Secretariat here yesterday.

Padma Vibhushan awardee Murthy has stepped down as Infosys CEO but continues as its chief mentor and board chairman. — PTI

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Aviation Notes
Near-miss: Blame game is on
by K.R. Wadhwaney

For the first time in the history of Indian aviation, the security of the President of India was compromised on February 9, 2009.

The Mumbai airport, shockingly, was not closed for civil operations, as mandatory. Had the commander (Capt Sukhwinder Singh Kohli) not shown his presence of mind and applied emergency brakes at the almost “decision making” take-off mode on runway-27, a tragedy would have taken place.

Joint director-general of civil aviation AK Chopra, through DG Naseem Zaidi, has been entrusted with the responsibility of making a probe in the near miss incident between Air India flight (IC-866) Airbus A-321 and three VVIP helicopters (Pratap 1,2 and 3). Before he announces the findings in the incident, it is vital that the aviation secretary or Zaidi should reveal as to why and how the airport was not closed and who was to be blamed for this blunder?

Providence more than human endeavour saved lives of the VVIP and that of the crew and passengers of the plane. (A day later another near-miss incident occurred at Jorhat. The blame game is on).

The Mumbai near-miss incident was not the first one. The incidents (13 in 2003, 15 in 2004, 21 in 2005, 26 in 2006 and more than 30 in 2007 and 2008) have increased immensely. The authorities say it is because of increased traffic. This argument is unacceptable. Had high traffic been the factor, there should have been three or four time more near-miss incidents in London, or New York.

An important factor for the high quantum of near-miss incidents, in addition to the human fallibility factor, is that the system in both civil and Air Force corridors appears to have taken a beating. Add to it, the volume of the needless ego in vex aviation sector, the situation has turned murkier than it should have been.

According to preliminary investigations, Air Force helicopters that took off from Colaba's INS navy base Kanjoli landed without getting clearance from the ATC. The Air Force bosses contest this claim. They vehemently maintain that all requisite rules were adhered to. The war of words between “bosses” of civil aviation and Air Force has erupted.

What has caused immense pain in the aviation sector is that two ATCs have been de-rostered and Air India's cockpit crew has been cleared for flying.

According to analysts, blame seems to rest with the ATCs. If it is so, the guilty should be punished. But while punishing them, over-all situation has to be studied. The ATC has been heavily under-staffed for years. Its qualified and efficient officials do not get due emoluments for the work they put in. There is no duty and time limit rule existing in the tower. In other developed countries, the rule of governance works.

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Investor Guidance
Lock-in period of PPF not 15 years
by A.N. Shanbhag

Q: I was planning to do some investment for my daughter on her first birthday. My husband does not want to invest more than Rs 5,000-8,000 every year. What I should invest as I did not find insurance/ULIP policies very rewarding. I don’t want to invest inequity due to the markets crashing.

— Rashmi Subu

A: An investment in PPF (public provident fund) is very effective for catering to expenses required as your daughter grows up. PPF offers 8 per cent tax-free every year and is an extremely safe investment. Also, it is a misconception that the lock-in period of PPF is 15 years. From the end of the sixth year you can start withdrawing money, if required

Form H

Q: My query is about the continuation of PPF after the post maturity. I read in your column that such continuation has to done by filing Form H.

In my case, I have continued my account post maturity but not filed Form H within one year of the maturity period. We were not intimated by the head post office about the expiration. Can you advice on the way forward?

— Rangnath Kshirsagar

A: You should file Form H immediately. Better late than never. We hope that the deposit office accepts your late filing of the form. Let them know that you would like to get the account regularised. The bank may have a certain procedure that you will have to comply with.

Bank deposits

Q: I have a query regarding interest earned on bank deposits. Banks deduct TDS in various ways on such deposits - some quarterly, others end of financial year, or others on maturity.

My question is can the depositor also choose to offer such income for tax either at end of each financial year (in case of multi-year deposits) or at maturity (if the interest is paid to him on a cumulative basis)?

- Sonal Shah

A: TDS on interest is deducted by banks each year if the same is above Rs 10,000. The same is true even in the case of cumulative deposits where the interest is accrued and payable at the end of the term.

As per the tax law, interest earned, whether received or accrued, has to be offered for tax every year as and when the investor earns it.

The authors may be contacted at wonderlandconsultants@yahoo.com

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