SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

25 pc safeguard duty sought 
New Delhi, June 27
The government has said that it is monitoring the situation of steel dumping in the country. Talking to The Tribune, Steel Minister Virbhadra Singh said, “We are monitoring the situation and as yet it is not very alarming”. “We are in dialogue with the Commerce Ministry on the issue and appropriate steps would be taken in due course of time as and when the need arises,” he clarified when asked about the timeline within which the safeguard duty would be imposed.

Budget Countdown – II
Textile industry seeks special package
Chandigarh, June 27
Bogged down by the high prices of raw material, slowdown in demand in overseas market, currency volatility and unavailability of funds granted under the Textile Upgradation Funds Scheme (TUFS), the textile sector in the region is hoping for some reprieve from the Finance Minister, as he gets ready to present his Budget proposals on July 6.

Investor Guidance
Bequeathed amount tax-free in the hands of recipient
Q:
I would like to get some clarifications regarding gift tax under Sec. 56. I have read that gifts if given under a will or by way of inheritance or in contemplation of death of the payer are tax-free.




EARLIER STORIES



Aviation Notes
AI inflicted with ‘terminal disease
Whatever may be government's reluctant bailout quantum of infusion, the measure will merely be a temporary relief for the deteriorating health of the ‘Maharaja’, once a robust and majestic personality. The ‘Maharaja's’ fall from grace is entirely on account of management's unrealistic and flimsy actions.

 

 





Top








 

25 pc safeguard duty sought 
Bhagyashree Pande
Tribune News Service

New Delhi, June 27
The government has said that it is monitoring the situation of steel dumping in the country. Talking to The Tribune, Steel Minister Virbhadra Singh said, “We are monitoring the situation and as yet it is not very alarming”. “We are in dialogue with the Commerce Ministry on the issue and appropriate steps would be taken in due course of time as and when the need arises,” he clarified when asked about the timeline within which the safeguard duty would be imposed.

“I do not think dumping can hamper the growth of the Indian steel industry at present,” the minister said.

The Safeguards Directorate has made a strong case for safeguard duties stating that cheap inflows from China and other countries are hurting the domestic industry.

The Directorate, in its recommendation to the inter-ministerial board on safeguard, has sought the imposition of 25 per cent safeguard duty on imports of items like hot-rolled coils, sheets and strips, shipped below $500 per tonne to India.

The recommendation of Directorate General of Safeguards (DGS) is based on its findings that surge in imports of flat steel items, mainly used by auto and white goods sector, has caused "serious injury" to domestic steel makers.

However, Micro Small and Medium Enterprises (MSME) and exporters of engineering goods have opposed the DGS recommendations to levy the safeguard duty on steel imports, saying the move will hurt the sector as domestic prices may rise further.

In May, India's steel imports surged by 21 per cent to 5.28 lakh tonnes against 4.35 lakh tonnes. Of the total imports, the shipment from CIS countries contributed to 28 per cent, as per Steel Ministry's data. Concerned over rising steel imports during the past few months, two private producers — Essar Steel and Ispat Industries - had filed a petition for imposing safeguard duty and the same was supported by SAIL and JSW Steel.

Top

 

Budget Countdown – II
Textile industry seeks special package
Ruchika M. Khanna
Tribune News Service

Chandigarh, June 27
Bogged down by the high prices of raw material, slowdown in demand in overseas market, currency volatility and unavailability of funds granted under the Textile Upgradation Funds Scheme (TUFS), the textile sector in the region is hoping for some reprieve from the Finance Minister, as he gets ready to present his Budget proposals on July 6.

Considering the slowdown in the past over one year, the textile sector in the region is hoping for a special package to bail it out of the present crisis. With the government already having assured them of some special incentives, they are hoping for an increase in duty drawback, release of funds under TUFS and more budgetary allocations for research and development, so that they can retain their competitive edge over China.

S P Oswal, chairman of Vardhaman Group of Companies, said the government must try and remove all direct and indirect levies on industry, thus making the Indian textile sector more competitive in the global market. “In this recessionary phase, only those can survive who can offer the best product at the lowest price. Thus we hope that the government will be able to increase the duty drawback, just as China and Pakistan have done to safeguard their own textile industry,” he said.

Agreeing with Oswal, Satish Bagrodia, chairman of Winsome group and president of PHD Chamber, said the interest subvention on export credit should again be restored to four per cent. " Four per cent interest subvention allowed in export credit was withdrawn in October 2008, of which two per cent was reinstated in the first stimulus package announced last year. With the Budget round the corner, we are hoping that the remaining two per cent interest subvention would also be restored. We were also expecting restoration of duty drawback to the levels that prevailed before the reduction effected in September 2008,” he said.

Sunil Kumar Jain, former president of North India Textile Mills Association (NITMA) said though the government had cleared the backlog for TUFS scheme, no more money was released under this scheme after September 2008. He added that textile and clothing industry is already in a serious crisis and the coming months could see substantial closure of units and loss of jobs.

Industry in Panipat, which accounts for 40 per cent of the handloom exports from India, too, looks forward to easy availability of finance to the industry and better marketing and management inputs. Ramesh Verma, president of Handloom Exports Manufacturers Association, Panipat, while reiterating the demand of easy finance options for the sector, demanded that a special package be given to the textile sector. The Budget should also create a fund for setting up research and development centres in all textile hubs and help create a direct linkage between manufacturers and their overseas clients.

Top

 

Investor Guidance
Bequeathed amount tax-free in the hands of recipient
by A.N. Shanbhag

Q: I would like to get some clarifications regarding gift tax under Sec. 56. I have read that gifts if given under a will or by way of inheritance or in contemplation of death of the payer are tax-free.

I am 80 years old. I have no close relatives left. I have made a will bequeathing to three friends who are helpful to me sums of Rs 5 lakh or more. I have also bequeathed some money to the executors of my Will; for they will have to take time and trouble to settle my estate and give donation to charity etc. Do the above clauses mean that they will not have to pay any tax, whether they receive the amount by way of cheques, fixed deposit or Government of India (GoI) Bonds?

— Naina Merchant

A: Yes, you are right. The relevant clauses of Sec. 56 would render these amounts, bequeathed by you tax-free in the hands of the recipients.

As regards gift given in contemplation of death, according to Section 191 of the Indian Succession Act, gifts can be made in contemplation of death by a person who is ill and expects to die shortly and delivers to another the possession of any movable property (not immovable) as a gift in case he or she dies. Such a gift may be revoked by the donor if he or she recovers from the illness.

PPF account

Q: I would like the following information with regards to Public Provident Fund (PPF).

1. To start the PPF account, where do I go? Is it the post office or some banks?

2. What is the legal procedure and documents required to start the PPF account.

3. The minimum investment per year is Rs 500 and the maximum is Rs 70,000. Please correct me if I am wrong.

4. Is there a lock-in period like other ULIP plans?

5. If I open an account and if I pass away what would happen to the account?

6. If I want to close the account, is there a penalty?

— Jonas Barboza

A: 1. You can start a PPF account either with a post office or with any nationalised bank such as SBI, BOB etc.

2. Normal account opening formalities are needed in terms of photograph, PAN photocopy, address proof etc.

3. The minimum contribution is Rs 500 per year and the maximum Rs 70,000.

4. The lock-in period is 6 years. After that you can withdraw 50 per cent of the balance to your credit four years back.

5. One can nominate anyone to receive the proceeds in the event of the account holder passing away. This should be done at the time of opening the account.

6. The account cannot be closed prematurely per se. It is a 15-year scheme and one needs to contribute the minimum Rs 500 per year.

RBI nod not needed to sell flat

Q: Please advise me on the following points:

I have a flat in Kolkata for the past more than 30 years. I want to sell it now to a friend in Kolkata. Please advise if I had to take a permission letter from the Reserve Bank of India.

2) Also please advise whether I can put the entire money in government securities to save capital gains tax.

3) How much will be capital gain and tax based on the following data.

a) Purchased in the year 1976 for a sum of Rs 1,00,500.

b) I expect to sell it for a sum of Rs 54,00,000 in a few weeks as negotiations are going on.

— B C Mathur

A: You don’t need RBI permission to sell the flat. You may put the capital gain amount in capital gain tax saving bonds of REC or NHAI. Note that there is a limit of Rs 50 lakh on investment in these bonds. Based on the data that you have sent, the capital gain amount would be Rs 48.15 lakh.

Resident can’t have non-resident accounts

Q: I work for an Indian bank. My query is can an Indian National serving abroad having NRI status have both NRE and ordinary resident account in the same branch?

We have a NRI customer who is retired defence personnel. He is having his pension and other ordinary bank accounts with us. Now, he wishes to open an NRE account. Our previous branch manager who had come from an NRI branch told us that we cannot have two status accounts of the person at same branch. My customer says that he is maintaining both NRE as well as ordinary accounts with some other bank. Is this practice correct?

— R U Bhangle

A: Your previous branch manager is right...however with one small yet significant modification - a person cannot have both resident and non-resident (NRE, NRO, FCNR) accounts per se, whether at the same branch or otherwise. The simple logic being that a person is either a Resident or a non-resident, he cannot be both. So a resident can have resident accounts whereas a non-resident can have non-resident accounts. Any resident accounts of a non-resident should be compulsorily redesignated as NRO accounts.

The authors may be contacted at wonderlandconsultants@yahoo.com

Top

 

Aviation Notes
AI inflicted with ‘terminal disease

by K.R. Wadhwaney

Whatever may be government's reluctant bailout quantum of infusion, the measure will merely be a temporary relief for the deteriorating health of the ‘Maharaja’, once a robust and majestic personality. The ‘Maharaja's’ fall from grace is entirely on account of management's unrealistic and flimsy actions.

Why the infusion will have 'temporary effect' is because the losses will continue to mount as politicians and bureaucrats are in no position to reduce or arrest overhead expenses of the top heavy officials of the National Aviation Company India Limited (NACIL).

The indepth study reveals that 'Maharaja' has been inflicted with 'terminal disease' by vested interests and the government infusion will merely succeed in delaying the unwarranted death. The only ray of hope of saving 'Maharaja' is that Prime Minister Manmohan Singh brings about far-reaching changes in the top-heavy management cadre from 'political authority to professional functioning' in the NACIL, which is longing for a bout of fresh air.

The fact reveals that IA and AI were two arms of the national carrier before the merger was arbitrarily brought about. The merger meant blending of hearts, souls and bodies. Sadly, the ill-informed management severed Indian Airlines from the body altogether, causing enormous imbalances and unrest. The imbalances have become so widespread that part of IA colony in Vasant Vihar (Delhi) has been changed into 'all Air India colony'.

According to analysts, Indian Airlines was on the road to turning around when its CMD was Sunil Arora. This was just before the merger. Then it had an operating surplus of about Rs 40 crore. Its accumulated losses were about Rs 800 crore. Air India, too, had losses, but the situation was not so alarming. "How then just in a year, the losses have shot up to a level to need Rs 12-14,000 crore to bail out the NACIL?" asked several officials, who have a proven record in the amalgamated outfit.

In a recent meeting, Prime Minister Manmohan Singh has gone on record as saying that the government recognise owning the NACIL but help will be rendered when it is wholly restructured from every aspect of the commercial functioning of the international company. But restructuring will have to begin from the top, which, is too heavy and also too unrealistic.

Despite 'Maharaja's’ terminal disease, the NACIL can yet be saved if the national carrier is allowed to function as wholly commercial oufit, as foreign carriers, like Air France, Lufthansa, British Aiways, have been. The carrier has a huge team of competent officials, who can bring about Maharaja's mustaches wearing mischievous turn of olden days' if they are granted 'complete freedom to function'.

Top

 
BRIEFLY

Airlines launch special offers
New Delhi:
All major airlines, including Air India and Jet Airways, have come up with special fares to attract passengers on the domestic sector. Air India launched its special fares from Saturday for travel up to September 15, but tickets at these rates have to be bought by July 3. SpiceJet has introduced special fares starting from Rs 1,500 plus taxes for those wanting to fly to 18 destinations on its network between July 15 and September 15.— PTI

Allahabad Bank cuts lending rates
Kolkata:
Allahabad Bank on Saturday announced 25 basis points reduction in benchmark lending rates from 12.25 per cent to 12 per cent. The reduction would take effect from July 1. — PTI

Financial literacy centre
Chandigarh:
‘Samadhan’, the first financial literacy and credit counselling centre, promoted by Allahabad Bank, was inaugurated by Usha Thorat, Deputy Governor, RBI, in Kolkata on Friday. K R Kamath, CMD of the bank presided over the function. TNS

Top

 





HOME PAGE | Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Opinions |
| Business | Sports | World | Letters | Chandigarh | Ludhiana | Delhi |
| Calendar | Weather | Archive | Subscribe | Suggestion | E-mail |