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| Govt mulls
allowing pvt airlines to directly import aircraft NEW DELHI, Dec 16: Government is considering relaxation of the arduous procedures....more Rupee recovers from MUMBAI, Dec 16: The sucide attack in the Parliament house complex on Thursday rattled the Foreign....more KVIC piles up Rs NEW DELHI, Dec 16: The Khadi and Village Industries Commission (KVIC) must....more Inflation touches NEW DELHI, Dec 16: Triggered by the decline in prices of petroleum products......more |
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Sugar,
metal, cotton witness downward trend Bullion market registers considerable gains MUMBAI, Dec 16: While the bullion market registered considerable gains over the week, the sugar, metals and cotton markets witnessed a downward trend with prices crashing considerably as demand diminished noticeably. In the meantime, the oils ..........more Markets remain largely MUMBAI, Dec 16: Major equity indices at the Bombay Stock Exchange dived by more than two per cent.......more Finalise tax rates for 5 NEW DELHI, Dec 16: Federation of Indian Chambers of Commerce and Industry (FICCI) has....more |
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Rupee
recovers from early shock of terror MUMBAI, Dec 16: The sucide attack in the Parliament house complex on Thursday rattled the Foreign Exchange (forex) market, sending the Indian rupee into a tailspin but the timely intervention by Reserve Bank of India (RBI) lifted the rupee back to close steady during the week ended December 14, 2001. The forex market, which remained range-bound and quiet with a northward bias in the first three days of the week, suddenly became jittery on Thursday after news broke of the terror atack on the Parliament. Panic-stricken market players, fearing more damage, started heavy dollar buying. In addition, the shift in the spot date on account of Monday’s domestic holiday also prompted banks to build dollar positions. However, when the rupee dipped to the intra-day low of 47.89 and was was heading towards breaching the psychological barrier of 47.90, a few state-run banks, apparently on RBI’s behest, started selling dollars and arrested the slide. The domestic unit recovered partially the intra day losses and ended at 47.85/86 on Thursday. Renewed export dollar sales and unwinding of over dollar position by banks helped the rupee to gain about two paise on Friday. Opening the week on a steady note at 47.8250/8350, the rupee swung in both ways, touching the week’s high of 47.79 and slipping to the low of 47.89 during the week, before closing steady at 47.8250/8350—the same level on which it finished on the previous weekend. Traders said the overall sentiment continued to be positive with the prevailing lower oil prices and ever increasing forex reserve of the country which stood at a record high of US dollar 47,109 million. Any temporary mismatch in demand and supply could be met by RBI, they added. In the forward dollar market, far forward premiums moved in a steady range, while the near terms segments (upto six months) were seen moving sharper, tracking the call money rate. The first month annualised premium moved in a wide range of 6.15-6.75 per cent while the six months’ premium moved in the 61.25-6.45 per cent range. According to Mr R K Amin, chief forex dealer at the Development Credit Bank Ltd, the rupee is expected to be in the range of 47.80-90 in the coming week. The forward premium is expected to be rule in an easy range if the call money rate remains stable around the repo rate of 6.50 per cent, he added. In the cross currency, the rupee fell sharply against euro by 42 paise to 43.09 and 116 paise against the pound sterling to 69.38 respectively as these currencies have appreciated against the US dollar, while the rupee finished the week 68 paise stronger against the Japanese yen at 37.58 from 38.26 of the previous week-end. At the international forex market, the Japanese yen continued its downtrend against the US dollar and plunged to a three-year low. Talk of bank of Japan buying foreign bonds which will in turn weaken the yen, the fear of a prolonged recession in Japanese Economy and Finance Minsiter Masajuro’s comment that the country must try to guide the yen lower, all affected the sentiment against the yen. The euro ralled against the dollar after it jumped against the yen. The US fed rate cut also failed to induce any dollar buying and euro gained as the rate cut was widely expected. Elsewhere, the sterling pound strengthened to one-month high against the dollar and a 2.5 year high against the yen as the global investors hunted for better yields with falling US interest rates. (UNI) |
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KVIC piles up Rs 750 cr inventories NEW DELHI, Dec 16: The Khadi and Village Industries Commission (KVIC) must clear the accumulated inventories worth Rs 750 crore immediately and evolve a suitable marketing strategy for the purpose, the standing committee on industry has said. The committee has expressed serious concern over accretion of inventory to the tune of Rs 750 crore and recommended that the KVIC make all efforts to clear it as soon as possible. The committee made the suggestion ‘on the action taken note of Ministry of Small Scale Industries and Agro and Rural Industries on the 43rd report on credit flow to small scale industries’. Noting that the KVIC has not changed according to the market demand, the report said, "the KVIC should sketch effective marketing strategy for clearing the stocks which has piled up over the years." The Government is providing adequate budgetary support to the kvic for the development of the sector. Against a release of Rs 202 crore to the KVIC in the financial year 1999-2000, a sum of Rs 320 crore has been provided in the current fiscal. The committee has suggested that a statement showing state-wise break-up of the sum of Rs 320 crore may be submitted to it. Adequate evaluation of the past trends and capacity of units to increase the turnover, depending on availability of orders and infrastructure, should be made to extend the work orders by the banks. The committee feels that the branch managers who meet their targets should be suitably rewarded. Noting the narrowing gap between the cost of borrowing and lending for financial institutions, the committee has recommended that the possibility be explored by Small Industries Development Bank of India (SIDBI) and ADBI to retire the old high cost dues and facilitate fresh loans to give impetus to SSIs. Also there should be a change in the attitude of the bank officials at the lower levels and they should take a proactive role in encouraging entrepreneurship and provide technological advise and financial inputs to strengthen the SSIs. The committee has recommended further simplification of procedural formalities on an urgent basis, which it said still remain a nightmare for entrepreneurs. Since a major part of venture capital has gone to sectors other than the SSI, therefore the committee has recommended that a strong culture of venture capital for SSIs be built up. (UNI) |
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Inflation touches 119-week low NEW DELHI, Dec 16: Triggered by the decline in prices of petroleum products and manufactured products, the inflation rate witnessed yet another decline by 0.13 per cent for the second successive week to touch a 119-week low of 2.27 per cent on December one. It was 2.40 per cent the week earlier, and 8.33 per cent during the same period under consideration last year. The latest inflation rate was the lowest since August 21, 1999 when it was 2.20 per cent. The recent drop in the inflation rate was mainly attributed to the considerable fall in the prices of furnace oil, light diesel oil, suji and purified terepthalic acid. Mainly due to recessionary trends prevailing in the country, the inflation rate is likely to witness a fall in the coming months, according to financial experts. The inflation rate based on consumer price index for industrial workers clipped off 0.50 per cent to touch 4.23 per cent in October from 4.73 per cent in the previous month due to a decline in retail prices. After remaining unchanged for three consecutive weeks, the official wholesale price index for all commodities (base 1993-94) showed a 0.1 per cent rise to 162.2 on December one against 162 in the previous week. This increase was due to a substantial jump in the indices of food articles and non-food articles. The final wholesale price index for all commodities (base 1993-94) and the inflation rate based on final index remained unaltered at their respective provisional levels of 162.4 and 3.18 per cent on October six. The index for primary articles rose by 0.8 per cent to 170.0 from 168.6. But the indices for fuel, power, light and lubricants declined by 0.3 per cent to 230 from 230.7. Similarly, the index for manufactured products dipped by 0.1 per cent to 144.3 from 144.4. With fruits and vegetables becoming dearer by four per cent, maize, barley, fish (inland), poultry chicken and pork by three per cent each, jowar and bajra by two per cent each, gram and eggs by one per cent each, the index for food articles, under the primary artices group, shot up by one per cent to 180.2 from 178.4. But the prices of arhar slumped by four per cent, urad by three per cent, moong and masur by two per cent each, and rice, condiments and spices by one per cent each. The index for non-food articles rose by 0.3 per cent to 148.3 from 147.9 because copra prices spiralled by seven per cent, linseed and raw tobacco by three per cent each, raw jute and kardi seed by two per cent each, and raw cotton, rapeseed, mustard seed and sunflower by one per cent each. However, the mesta prices plummeted by 11 per cent, gingelly seed by four per cent, fodder by three per cent and raw skins by one per cent. A whopping eight per cent drop in furnace oil prices and two per cent decline in light diesel oil prices brought down the index for fuel, power, light and lubricants by 0.3 per cent to 230 from 230.7. The index for food products, under the manufactured products group, slumped by 0.4 per cent to 146.2 from 146.8 because sooji, atta and gur became cheaper by four per cent each, maida by three per cent, and gingelly oil, groundnut oil and sunflower oil by one per cent each. But bran (all kinds) and coconut oil became dearer by two per cent each. A slender one per cent decline in prices of beer and alcohol made the index for beverages, tobacco and tobacco products slide by 0.1 per cent to 192.6. A two per cent drop in prices of creamlaid woven paper and M G poster paper led to a 0.2 per cent slide in the index for paper and paper products from 171.1. The index for chemicals and chemical products fell by 0.1 per cent to 169.4 from 169.5 because purified terepthalic acid became cheaper by six per cent, caustic soda by two per cent and acid (all kinds) by one per cent. As steel ingots (plain carbon) became dearer by six per cent, aluminium rolled products and lead ingots by one per cent each, the index for basic metals, alloys and metals products went up by 0.1 per cent to 140.2. However, the aluminium ingots prices declined by one per cent. The index for transport equipment and parts rose by 0.3 per cent to 145.9 from 145.4 because other car spare parts became dearer by two per cent and truck chassis (diesel) and manufactured body for trucks, vans by one per cent each. The indices that remained unchanged at their previous week’s level were minerals, textiles, wood and wood products, leather and leather products, rubber and plastic products, non-metallic mineral products, machinery and machine tools. (UNI) |
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Sugar, metal, cotton
witness downward trend MUMBAI, Dec 16: While the bullion market registered considerable gains over the week, the sugar, metals and cotton markets witnessed a downward trend with prices crashing considerably as demand diminished noticeably. In the meantime, the oils and oil seeds market witnessed a mixed trend in respose to market forces. Bullion The bullion market which opened steady at the beginning of the week rose to the highest on this saturday after marginal fluctuations thanks to strong overseas advice and growing demand. Silver .999 grade which opened steady drifted as low as Rs 7275 per kg during the week closed at the highest level at Rs 7450 compared to the previous finish of Rs 7315, registering a gain of Rs 135 on account of strong overseas advice coupled with short supplies. Gold prices followed suit with standard mint registering a gain of Rs 40 while closing at Rs 4580. Gold biscuit rose substantially and closed at Rs 53,700, with a gain of Rs 450 against the previous finish of Rs 53250. Standard mint and gold biscuits went as high as Rs 4590 and Rs 53900 on this saturday. Sugar sugar prices lost ground on gradually diminishing demand after the festival season. This was compounded by the increased supply of sugar through the public distribution system. Small grade lost by Rs 10/14 while closing at Rs 1375/1416 against the previous rate of Rs 1385/1430. Medium grade lost by Rs 20/19 as it touched the lowest while closing at Rs 1425/1471, this week end. The ex-factory (nakka) small variety followed suit buy touching the lowest at Rs 1350/1375 at this weekend, losing by Rs 20/5 compared with the previous close of Rs 1370/1380. Medium grade in this category also lost by Rs 8/5 while closing at Rs 1402/1435 against the previous rate of Rs 1410/1440. Metals Select metal prices declined marginally on thin industrial offtake while others remained steady on demand supply match. However, copper heavy in this category registered a gain of Rs 50 while closing at Rs 11050 on a slight boost in demand. Copper wire bars, zinc slabs, tin slab (per kg) and nickel cathod (per kg) declined by Rs 50, Rs 50 , Rs 6 and Rs 11 to Rs 12550, Rs 6700, Rs 296 and Rs 347 respectively. Government securities prices witnessed volatile swings in both ways. Gilt prices fell in the first two days of the week due to profit taking selling and concerns of tight liquidity. However, it staged a fresh rally on Wednesday on a hope of repo rate cut by the RBI after the US fed cut the rate. The reports of the terror attack in the Parliament house complex once again pulled the Government bond prices on Thursday, though it recovered moderately on Friday. Buying interest was mainly restricted to 10-11 papers. The yield on 9.85 per cent 2015 bond closed at 8.27 per cent as compared to 8.26 per cent of the previous week. While that of the bench mark 11.50 per cent 2011 ended at 7.98 per cent as compared to 8.07 per cent of the previous week. (UNI) |
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Markets remain largely immune to attacks on Parliament MUMBAI, Dec 16: Major equity indices at the Bombay Stock Exchange dived by more than two per cent during the week as investors hesitated to take any position in the market immediately following re-emergence of worries about global economic turnaround and persisting uncertainties about India’s response to the terrorist attack on the Parliament on December 13. The immediate reaction to the terrorist attacks on the Parliament on Thursday, in which atleast 12 people died and several were injured, was severe but towards the end market regained its composure. Sumit Garg of Citicorp Securities said, ‘no doubt the incident caused slight nervousness in the market and investors became more cautious amid worries of escalation of tension on the Indo-Pak border. However, the undertone is still positive.’ The benchmark sensex declined by 82.77 points, or 2.40 per cent, to 3,308.86 points compared with last week’s close of 3,468.19 points. During the week the BSE sensex moved within a range of 159.33 points between 3,308.86 and 3,468.19 points. The S P CNX nifty of the National Stock Exchange (NSE) declined by 24.45 points, or 2.19 per cent, to 1,087.85 points as against last Friday’s close of 1,112.30. During the week dow fell 2.4 per cent while the S P 500 dropped 3 per cent and the NASDAQ index slid 3.4 per cent amid concerns of a slipping US economy. According to a broker, investors were keeping up their guard after the recent rally in the market and buying scrips from the sectors like pharmaceuticals and automobile which did not participate in the rally. Information technology scrips led the fall during the week after losses in American Depository Receipts (ADRs) of major tech firms at the wall street while select automobile and pharmaceutical scrips gained modestly on better future outlook. Foreign Institutional Investors (FIIs) sold equity worth Rs 130.50 crore during the week. However, mutual funds were net buyers in equity at Rs 212.0 crore. However, selling by foreign funds was overshadowed by buying by domestic institutional investors. Among technology scrips, Infosys Tech lost Rs 384.5 to Rs 4,165.75, Satyam Computers declined by Rs 25.75 to Rs 246.65 and NIIT Ltd was down by Rs 9.90 at Rs 235.70. Shares of cement companies were down on profit selling after a handsome rise over the past two weeks. ACC was down by Rs 7.60 at Rs 158.80 and Larsen & Tubro (L&T) fell Rs 5.50 to Rs 214.15. Pharmaceutical and automobile shares showed some upward movement. Ranbaxy Lab closed Rs 4.70 higher at Rs 741.70, Cipla gained Rs 48.0 at Rs 1,180.10 and Wockhardt rose by Rs 26.75 to Rs 507.55 while Dr Reddy ended Rs 11.0 down at 928. Among automobile scrips, Mah & Mah and Tata Engg gained and Bajaj Auto declined. Other major gainers at the BSE were Nestle, HLL and VSNL. Losers included ITC, Reliance Ind and Zee Tele. According to market sources, the market is expected to move upward during the next week as investors may like to pick up battered software stocks and other cyclical scrips. (UNI) |
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Finalise tax rates for 5 years
tax agriculture, NEW DELHI, Dec 16: Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested that the Government announce in the 2002-03 budget a long term fiscal policy for the next five years for the direct and indirect tax rates, and bring agriculture income and more and more services into the tax net In its 16-point charter of demands, including ten proposals for direct taxes, FICCI said that instead of burdening the existing taxpayers time and again with more tax burden, it is time to widen the tax base. One area in this direction relates to taxation of agriculture income. Commercial operations under agriculture should also be brought under the purview of tax net. Rate of corporate taxation needs to be brought down from 35 per cent to 30 per cent. Further, small companies should be taxed at a lower rate of about 20 per cent as is the practice in the united kingdom. In the case of personal taxation, the maximum marginal rate of tax of individuals at 30.6 per cent applies to income above 1.5 lakh. In countries such as Hong Kong and China the maximum rate of 45 per cent applies to income above the equivalent of Rs 70 lakh, and the rate of 35 per cent is levied on income above Rs 40 lakh. While the Government may keep the rate as constant in case of personal taxation, the levels at which these rates are applicable may be raised. There is need for investment allowance in the country to achieve higher industrial growth and to stimulate investment. There is a need to withdraw the minimum alternate tax (mat) from the provisions of Income Tax Act has proved to be counter-productive and disincentive for promotion and growth of industrial activity. However, if the same is not possible then at least tax credit facility should be allowed. Domestic company should not be subject to additional tax under Section 115-0 on so much of income received by way of dividends from other domestic companies on which tax has already been paid. The cascading effect in the taxation of income must be addressed on an urgent basis to facilitate corporate restructuring. Contribution to Old Age Social Income Security (OASIS) pension should be included in the specified savings instruments to the extent of Rs 20,000, besides the existing Rs 60,000 under Section 88. Uniform rate of income tax on the profits of insurance business be made applicable to domestic and foreign players. On indirect taxes, FICCI said the cascading effect arising from tax on tax which makes the industry less competitive should be addressed. There should not be any general reduction in import duty for a period of two to three years. While lowering the customs duty, it should be ensured that it does not adversely affect the domestic industry. The phasing of peak duty reduction to reach 20 per cent in three years must be done on priority on raw materials and not on finished goods. A system of graded import duty structure should be introduced in all the cases. There should be reasonable duty difference between raw materials, components and finished goods. The anomalies in duty structure should be removed. The concept of Special Excise Duty (SED) should be abolished altogether. There should be one rate of excise duty in place. Tax base should be widened and for the same more and more services should be brought under the purview of service tax. (UNI) |
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