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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

India ready to buy $10 b IMF bonds: Montek
Washington, April 26
Montek Singh AhluwaliaIndia is ready to buy about $10 billion (around Rs 50,000 crore) of International Monetary Fund (IMF) bonds, the Wall Street Journal said quoting Planning Commission deputy chairman Montek Singh Ahluwalia. “If the IMF can issue the securities, it’s an easy way for us to make a contribution,” said Ahluwalia.

FDI inflows to grow despite downturn: Govt
New Delhi, April 26
“Foreign direct investments (FDIs) to India are unlikely to fall despite the global downturn. The fact is our share of world FDI inflows will continue to grow,” said a government official.

Infosys top brass gets over Rs 10-cr hike
Bangalore, April 26
IT major Infosys' top brass, including its directors and senior-most management personnel, got a hefty collective hike of over Rs 10 crore in their pay packets during the last fiscal, with chief financial office V Balakrishnan leading the tally with a hike of Rs 1.73 crore.



EARLIER STORIES



Jobless workers backed by the Labour Party protest against the deteriorating job market in Taipei
Jobless workers backed by the Labour Party protest against the deteriorating job market in Taipei on Sunday. Taiwan's unemployment rate rose to a record 5.81 per cent in March as companies slashed jobs due to recession. — AFP

Tatas still counting Nano numbers
Mumbai, April 26
The booking for the world’s cheapest car — Nano launched by the Tatas - has ended but the numbers are still being counted, a Tata Motors spokesperson said. The market estimates on the bookings vary from as few as a couple of lakhs to over one million.

Market Update
Bulls at it again
The bulls showed resilience for yet another week amidst negative trend across global markets and ended in positive terrain for the seventh successive week. Growing optimism over some sign of recovery in the global economy and the banking sector continued to drive the key indices higher. The Sensex gained 2.8 per cent for the week at 11,329 and Nifty gained 96 points to close the week at 3,480.

Tax Advice
Husband is legal heir
Q. You have stated in reply to my query that husband is legal heir as per the Hindu Succession Act. In this regard I have consulted some advocates and have also shown your reply to them. They are of the opinion that the Hindu Succession Act as quoted in the reply has recently been amended so as to exclude husband from the list of legal heirs. You are requested to check up again and state the correct position.





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India ready to buy $10 b IMF bonds: Montek

Washington, April 26
India is ready to buy about $10 billion (around Rs 50,000 crore) of International Monetary Fund (IMF) bonds, the Wall Street Journal said quoting Planning Commission deputy chairman Montek Singh Ahluwalia.

“If the IMF can issue the securities, it’s an easy way for us to make a contribution,” said Ahluwalia. He is in the US to attend the spring meetings of the IMF and the World Bank.

The IMF is finalising plans of its first bond offering and is lining up BRIC countries, including Brazil, Russia, China and India ,as purchasers. The bond would be sold to the Central bank, not to individual investors.

Ahluwalia told the journal that buying bonds was a better alternative for India than taking an IMF loan as Japan had done. That’s because the Indian Central bank could simply purchase the bonds and hold them in its reserves. That wouldn't require separate Indian government approval.

“Separately, Ahluwalia said he believed India could grow more rapidly than the 4.5-per cent IMF forecast this year and 5.6 per cent for next year,” the WSJ said.

The report further quoted Ahluwalia as saying Indian banks are relatively in good shape, though their lending is still constrained. The government, he added, stands ready to increase fiscal stimulus, although the amount depends on the outcome of the Lok Sabha elections.

“We are both capable and interested in doing more stimulus,” Ahluwalia said.

Brazil and Russia haven't said how much they are likely to spend on the bonds. British Prime Minister Gordon Brown said at the G-20 summit earlier this month that China would chip in $40 billion. But there is debate within China about whether that would be too large a purchase. — PTI

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FDI inflows to grow despite downturn: Govt
Bhagyashree Pande
Tribune News Service

New Delhi, April 26
“Foreign direct investments (FDIs) to India are unlikely to fall despite the global downturn. The fact is our share of world FDI inflows will continue to grow,” said a government official.

FDI into India is expected to be at least $40 billion in the year upto March 2010 on a favourable outlook,” said Department of Industrial Policy and Promotion joint secretary Gopal Krishna at the sidelines of an AMCHAM function on Friday.

However, difference have once again cropped up between the Finance Ministry and the Commerce Ministry over the new guidelines in FDI.

“The Finance Ministry has raised some generic issues, we should be able to answer those questions and address them properly,” Gopal Krishna said .

According to the new guidelines if an Indian company with foreign equity of less than 50 per cent invests in another firm, it would not be considered as FDI.

Corporates read the new guidelines as to allow FDI or exceed the caps, if downstream companies are created by indian investment firms. Krishna also said the FDI during 2008-09 fiscal year were likely around $37.5 billion, including reinvestment by foreign firms.

There will be some investment in 2009-10 which will be delayed but overall outlook is positive and optimistic, he said.

India had targeted an FDI inflow of $30 billion in 2008-09, but as per the last figures received between April-February it received $25.38 billion only.

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Infosys top brass gets over Rs 10-cr hike

Bangalore, April 26
IT major Infosys' top brass, including its directors and senior-most management personnel, got a hefty collective hike of over Rs 10 crore in their pay packets during the last fiscal, with chief financial office V Balakrishnan leading the tally with a hike of Rs 1.73 crore.

Surprisingly, the fattest pay package at the country's second-largest IT exporter does not go to its chief mentor and non-executive chairman N Narayana Murthy, co-chairman Nandan Nilekani or CEO and MD S Gopalakrishan.

Rather, it was head of European business and executive council member BG Srinivas, who was paid highest remuneration of Rs 4.67 crore in the fiscal ended March 31.

The collective remuneration of all the board members and top management personnel rose by Rs 10.28 crore to Rs 29.16 crore in the fiscal 2008-09, as per the auditors’ report to Infosys board on the consolidated financial statements of the company and its subsidiaries.

Srinivas was followed by Ashok Vemuri, who is based in the US and heads the company’s BFSI and capital markets business, in terms of total remuneration. Vemuri's total compensation rose to Rs 4.04 crore from Rs 2.81 crore in the previous fiscal. — PTI

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Tatas still counting Nano numbers

Mumbai, April 26
The booking for the world’s cheapest car — Nano launched by the Tatas - has ended but the numbers are still being counted, a Tata Motors spokesperson said.

The market estimates on the bookings vary from as few as a couple of lakhs to over one million. Tata motors itself has not given any information so far. The spokesperson said the company was still compiling the number and the exercise might take a few days.

Enquiries with some of the banks with which the company has tied up for booking and financing of the car also failed to reveal any information.

About 55% of the bookings have been for the top- end version of the Nano, 25% for the middle version and the remaining 20% is for the base model. — PTI

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Market Update
Bulls at it again
by Lalit Batra

The bulls showed resilience for yet another week amidst negative trend across global markets and ended in positive terrain for the seventh successive week. Growing optimism over some sign of recovery in the global economy and the banking sector continued to drive the key indices higher. The Sensex gained 2.8 per cent for the week at 11,329 and Nifty gained 96 points to close the week at 3,480.

The RBI, as part of its annual credit policy, cut its key short-term rates by 25 basis points each on last Tuesday, to prop up growth amid global economic slowdown. The repo rate, at which the RBI lends to the banks, was cut to 4.75 per cent, and the reverse repo rate, at which the RBI absorbs excess cash from banks, was reduced to 3.25 per cent, effective immediately. The bank rate, used by banks to price long-term loans, remained at 6 per cent. Banks’ cash reserve requirements (CRR) were also left unchanged at 5 per cent.

Political uncertainty may also lead to volatile swings on the bourses in the next few weeks with polling underway for India’s 15th Lok Sabha. Poll estimates point to a fractured mandate. Market may react negatively to an unstable government at the Centre.

Hero Honda

In an environment where most of the other companies are struggling to even maintain their topline performance left alone enhance it, Hero Honda has managed to deliver a stellar topline performance. Factors such as a deeply entrenched distribution network, extremely competent management team, rock solid balance sheet and ownership of some of the most admired motorcycle brands combine together to give the company such an edge. Given that the motorcycle demand in the country is far from reaching saturation levels, we expect the company to continue to add to shareholder value over the distant future. Investors may accumulate this stock on declines for steady returns over the next two to three years.

The company recently declared excellent forth quarter results. The growth in profits was mainly driven by a 13-per cent increase in volumes and better realisation during the quarter. It has done exceptionally well in maintaining its growth and margins. We also feel that its penetration into the rural markets has been a major factor for the robust volumes. An improvement in the availability of finance and benefits of the Sixth Pay Commission’s recommendations has also led to an increase in the overall volumes.

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Tax Advice
Husband is legal heir
by S.C. Vasudeva

Q. You have stated in reply to my query that husband is legal heir as per the Hindu Succession Act. In this regard I have consulted some advocates and have also shown your reply to them. They are of the opinion that the Hindu Succession Act as quoted in the reply has recently been amended so as to exclude husband from the list of legal heirs. You are requested to check up again and state the correct position.

— Dev Raj Aggarwal, Ludhiana

A. The Hindu Succession Act, 1956, to my knowledge was amended by the Hindu Succession (Amendment) Act, 2005. The amendment act contained amendments to Section 6 and Section 23 of the said Act so as to remove the discrimination by giving equal rights to daughters in the Hindu mitakshara co-parcenary property. There was no other amendment to the said Act. The general rules of succession in the case of a female Hindu dying intestate are contained in Section 15 of the said Act and Section 16 provides for the order of succession and manner of distribution among heirs of a female Hindu. Sub Section 1(a) of Section 15 of the said Act provides that the property of a female Hindu dying intestate shall devolve according to the rules set out in Section 16 firstly upon the sons and daughters (including children of any pre-deceased son or daughter) and the husband.

Battle casualties

Q. I am presently employed with the Army as a doctor and my annual earnings are in the tune of Rs 6 lakh per year. I am a battle casualty who suffered 20 per cent disability in an IED blast in an J&K. I was in low medical category for six months and then I was upgraded to full fitness. Am I entitled to tax concessions available for battle casualties?

— Maj Balkaran Singh

A. The provisions of Section 80U of the Income-tax Act, 1961 (the Act), provide for a deduction of an amount of Rs 50,000 if a person is certified by a medical authority to be a person with disability. The term 'person with disability' is defined in clause (t) of Section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995. The facts given in the query indicate that you are not suffering from any disability and, therefore, in view of the abovesaid provisions you would not be entitled to any deduction under Section 80U of the Act.

House rent

Q. I am a senior citizen and a retired Central govt. employee. I do not have my own house and pay Rs 3,000 per month as house rent to my son.

I want to know how much house rent rebate I can take for income tax purpose.

My detail of income is given as below:

— Lakshman, Bathinda

A. On the basis of the figures given in the query, the income from salary and interest aggregates to Rs 2,31,559. This is based on the presumption that medical allowance is in the nature of allowance, which is taxable. You would be entitled to a deduction of Rs.12,844/- towards the payment of rent provided the following conditions are fulfilled by you:

(i) The rent paid is in excess of 10% of your total income before allowing any deduction under this section;

(ii) the rent paid is in respect of accommodation occupied for the purposes of your own residence subject to the condition that a declaration in Form 10BA [vide Rule 11B] is filed alongwith the return;

(iii) the deduction is to be claimed only in cases where any residential accommodation is not owned by yourself or by your spouse or minor child or by a Hindu undivided family of which you are a member; and

(iv) You are not entitled to house rent allowance from the employer is eligible for exemption under Section 10(13A) of the Act.

The deduction for rent paid is limited to 25 per cent of total income or Rs 2,000 per month, whichever is less.

No tax would be payable for assessment year 2009-10 on the net income of Rs 2,18,720 (Rs 2,31,559 - 12,844 = Rs 2,18,715 rounded off to Rs 2,18,720) in view of the same being less than the maximum amount not chargeable to tax in case of senior citizens. This is based on the presumption that you are entitled to the deduction of Rs 12,844 towards the rent paid to your son.

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BRIEFLY

India ranks 5th in illicit financial outflows
WASHINGTON:
India ranks fifth globally among 127 developing countries for illicit financial outflows, according to a report released by the Global Financial Integrity (GFI). The report ‘Illicit financial flows from developing countries: 2002-2006’ estimates the total illegal capital flight from developing countries to be as high as $1 trillion per year. In 2006, around $10 were lost due to illicit outflows on every $1 received as official development assistance, it said. — PTI

Aptech-Falgo JV
MUMBAI:
Aptech is betting big on the huge Brazilian market and has entered into a 51:49 joint venture with the Falgo group to set up IT training centres in that country. “Latin America is a huge focus area for us. We plan to tap that market through Brazil where we have entered into a joint venture with the Falgo group. Brazil will be Aptech's hub for the LatAm region,” Aptech said. — PTI

IFC to invest $1 b in India
NEW DELHI:
The World Bank's private sector lending arm, International Finance Corporation (IFC) , has said it will invest $! billion in Indian companies during its financial year beginning June 2009. “IFC had invested over $1 billion in new commitments in India in financial years 2007 and 2008,” IFC director for infrastructure (Asia and Africa) said. — PTI

Mittal UK’s richest for 5th yr
LONDON:
With a fortune of £10.8 billion, India-born steel tycoon Lakshmi Mittal today emerged as the richest person in the UK for fifth consecutive year, but a whopping erosion of £16.9 billion in his wealth also earned him the title of the biggest loser. — PTI

BSNL partners Nokia
NE DELHI:
BSNL has tied up with Nokia for bundling 3G handsets along with its services. A senior BSNL official said the PSU has tied up with Nokia to supply handsets for its 3G subscribers. Nokia India Head, Operator Channels, V Ramnath said: “Nokia India has partnered BSNL in bringing to Indian consumers 3G services on a host of Nokia devices.” — PTI

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