Daily Excelsior...Business

Tough task for Punjab
to put state finances
on right track

CHANDIGARH, Mar 16: The Punjab Government, which will present the budget for 2008-09 tomorrow.....more

HC issues notice to
Airtel over its cheque
bounce complaint

NEW DELHI, Mar 16: The Delhi High Court has issued a notice to cellular operator Bharti Airtel on . .....more

Goair to expand
operations in south,
northeast, says its CEO

NEW DELHI, Mar 16: No-frill carrier Goair plans to induct five more aircraft by March-end and expand its operations to south and .......more

Now, job market to feel
subprime heat

NEW DELHI, Mar 16: After rattling the financial markets, the subprime woes may soon inflict a blow on the job arena as a downward pressure on bottom-lines is making a host of big-ticket employers cautious about their hiring plans. While companies like Merrill Lynch and ....more

ICICI bank, 10 other
Indian Cos among world’s
50 local dynamos

NEW DELHI, Mar 16: Going global is not the only trump card for an international recognition. ......more

Maruti races past
competition in mid-sized
Sedan segment

NEW DELHI, Mar 16: Country’s largest car maker Maruti Suzuki India, better known for .....more

Steel minister plans to
ask FM for removal of
import duties

NEW DELHI, Mar 16: Peeved at steel producers hiking prices arbitrarily, steel ministry is planning to write to the ......more

ITAT makes trusts’
registration with IT
dept easier

NEW DELHI, Mar 16: Making it easier for trusts to register themselves with the Income Tax department, the tax tribunal has ruled that registration process would be deemed to be complete if the application is not ....more

Deemed universities not to have free run in admissions

Ericsson, Samsung, Coca Cola owe crores to Govt in taxes

UCO Bank shifts Rs 104 crore bad loans to three ARCs

Cement prices to remain firm in medium-term: CMIE

Tough task for Punjab to put state finances on right track

CHANDIGARH, Mar 16: The Punjab Government, which will present the budget for 2008-09 tomorrow, may not find it easy to divert the state finances on the right track due to falling revenue receipts and increasing unproductive expenditure, an economist said.

In addition to it, Punjab Finance Minister Manpreet Singh Badal would have to think ‘out of the box’ for taking necessary steps to rejuvenate agricultural sector and address industry concerns, economist and former Vice-Chairman of Punjab Planning Board S S Johal said.

To put a break on the fiscal deterioration, the minister should make efforts to plug the rampant leakage of state tax revenue, rationalise Government expenditure and discontinue free power to farmers, he said.

The measures would lead to mobilisation of additional resources for meeting committed expenditure in annual plan of Rs 6,210 crore, he added.

"There is no need to impose any tax at all for State Government for resource mobilisation in the budget. Finance Minister just needs to stop tax evasion, discontinue subsidy like free power and control the Government expenditure like overstaffing. These steps will ensure quantum jump in revenue generation for the state exchequer," he said.

Analysis of Punjab finances reveal that the State Government has not been able to fully meet the revenue expenditure out of its revenue receipts for the last several years, leading to facing a situation of revenue deficit.

Punjab has revenue deficits of Rs 3,390.55 crore (2004-05), Rs 1,240 crore (2005-06), Rs 2,190.60 crore (2006-07) and Rs 1,429.49 crore (2007-08 estimated). (PTI)

HC issues notice to Airtel over its cheque bounce complaint

NEW DELHI, Mar 16: The Delhi High Court has issued a notice to cellular operator Bharti Airtel on a petition alleging that it had filed a cheque bounce complaint against one of its franchisee by misrepresenting facts.

Admitting a petition of Mathura-based Anmol Telecom seeking quashing of the criminal case filed by the telecom major, justice Sanjay Kishan Kaul has asked the company to file its response.

Neetu Bahel and Bhuvesh Kumar Bahel, proprietors of Anmol Telecom, alleged that the telecom major, after terminating its franchisee agreement, filed a criminal case for dishonour of a cheque, which was never presented to their bank for encashment.

Rajeev Ranjan Das, counsel for the firm, sought quashing of the criminal complaint and cited a report issued by a bank that the cheque of Rs 1.22 lakh was not presented at all.

"It was a gross misuse of judicial process. The trial court gravely erred in issuing summons against bahels who felt humiliated after being made accused in a criminal case with no fault of theirs," Das submitted before the court.

The petition said Anmol Telecom was appointed as Bharti Airtel’s service provider for Mathura region in Uttar Pradesh in 2005 and had submitted several post-dated cheques as guarantee towards collection of telephone bills from subscribers.

The franchisee agreement entered between them was later terminated and summons were issued against the firm and its proprietors by additional Chief Metropolitan Magistrate Sanjiv Jain of Karkardooma Courts for cheque dishonour. (PTI)

Goair to expand operations in south, northeast, says its CEO

NEW DELHI, Mar 16: No-frill carrier Goair plans to induct five more aircraft by March-end and expand its operations to south and the northeast India.

The airline, owned by the Wadia family, is also focusing on its frequent flyer programme with a host of initiatives, including intensification of its operations on routes mostly in demand, Goair chief executive officer Edgardo Badiali said here.

"We are evaluating different possibilities (of expanding operations) in the south and the northeast. It will depend on the strength of the market, the available infrastructure, space and the costs," he said when asked whether they planned to establish a hub in any southern or northeastern states.

Asked about reports that the Wadia family wanted to sell some stake in the company, Badiali said "the decision will be that of the family... There is lot of interest from investors from different fields."

Regarding plans to establish operational hubs in different parts of the country, he mentioned the major metros of Hyderabad, Bangalore, Chennai and Kolkata, but said the decision-making process was still in the evaluation stage.

On the fleet expansion plans, Badiali said "we will be adding five aircraft by the end of this fiscal to take our fleet to 11 aircraft. Our induction plan is to have a 31-aircraft fleet by 2012. So we will be adding five to six aircraft (each year) from 2009 to 2012."

The entire fleet of goair comprises airbus industrie’s most-sought after A-320 aircraft in an entire economy-class configuration.

With the expanding fleet, the airline wants to be first to consolidate its position on the existing routes and then add more destinations to its network, its ceo said. Goair currently flies to 11 destinations. (PTI)

Now, job market to feel subprime heat

While companies like Merrill Lynch and citigroup, who have been among the biggest sufferers of the subprime crisis in the US, have gone to the extent of cutting down on their huge headcounts, a number of global financial services firms have softened their hiring plans both in India and abroad.

There may be an impact of the overseas subprime lending crisis on the job market here, but it would not be a typical courtroom verdict, leading executive search firm Manpower India Managing Director Naresh Malhan said.

Placement scenario in India could see a slowdown due to the US subprime crisis, as those employers, having taken a hit on their bottomlines, would like to adopt a wait and watch policy, he noted.

Investment banks such as Merrill Lynch, Lehman brothers, Barclays and Deutche Bank were among the top recruiters of IIM graduates from India till last year. But in the recent placement season, campus hirings made by these firms have not matched to the previous years.

However, IIMs on their part have been mostly maintaining that their campus placements have remained unaffected by the subprime crisis and fears about recession in the us economy.

"Our main concern this year was the subprime crisis. We are relieved that this has not affected the placement at all and the average salary offered has been about 30 per cent more in comparison to last year," IIM-Ahmedabad Director Sameer Barua said after one of its student bagged the highest salary package of Rs 1.44 crore.

Market observers say that tightening financial conditions, thinning corporate profitability, huge write-downs and concerns of recession has forced businesses to scale down their spending plans. According to western media reports, citigroup alone could cut over 30,000 jobs over the next one and half years because of subprime related debt write-downs.

Besides, layoffs to the tune of over 10,000 people are expected from just about half-a-dozen other financial giants such as Merrill Lynch and Lehman brothers.

In addition to the multi-national firms, the domestic employers are also likely to have adopted a "wait-and-watch" approach regarding their recruitments and might revisit the issue only after assessing their current quarter financial performance, which would start coming in by mid of next month.

Losses revealed by blue-chip companies like ICICI bank have also made the industry cautious about the hiring plans.

"Indian employers continue to be positive, yet increasingly cautious about their hiring intentions. The softening of the hiring pace for April-June quarter can be attributed to uncertainties in some of the leading economies of the world," Manpower’s Malhan said.

According to latest Manpower Employment Outlook Survey, about 36 per cent of employers in India are optimistic about their hiring plans in the second quarter of 2008, which marks a fall from 42 per cent in the first quarter of this year.

Malhan further added that "there would be slowdown in the hiring spree, but on a case to case basis and above all merit would be rewarded".

Besides, there is optimism that any slowdown in hiring pace would be limited to a short period as human resources continue to be one of the biggest assets for companies and it would be a right talent base that would help them recover from any losses suffered due to the subprime crisis. (PTI)

ICICI bank, 10 other Indian Cos among world’s 50 local dynamos

NEW DELHI, Mar 16: Going global is not the only trump card for an international recognition. As many as 11 India companies, including the likes of ICICI bank and Bharti Airtel, have made it to a list of 50 ‘local dynamos’ for mastering the dynamics of their domestic markets.

These 50 firms from the world’s Rapidly Developing Economies (RDEs) are "domestically focused, at least for now, and have devised formidable business models with which to master the intense dynamics of their local markets," global consultancy firm boston consultancy group said in a report.

Other Indian companies in the list are two Tata group entities Indian hotels and Titan industries besides Amul, Apollo Hospitals, Cavinkare Group, ITC limited, NIIT, SKS Microfinance and Subhiksha.

Apart from the four bric countries - Brazil, Russia, India and China - the list also includes companies from Indonesia, Malaysia, Mexico, Poland, Slovakia, Poland and Thailand.

The study titled "the BCG 50 local dynamos - how dynamic RDE-based companies are mastering their home markets - and what MNCs need to learn from them" has 15 companies from china, including the internet search engine baidu.Com.

BCG said these companies were selected on the basis of criteria such as high growth and original business model specifically adapted to the unique challenges posed by RDEs.

According to BCG, companies from RDEs are "staying home" and conquering their domestic markets.

Further, these firms are using innovative business models to beat MNCs and established domestic incumbents, many of which are state-owned entities. (PTI)

Maruti races past competition in mid-sized Sedan segment

NEW DELHI, Mar 16: Country’s largest car maker Maruti Suzuki India, better known for its compact cars, has zipped past competition, including Honda and Hyundai, in the mid-sized Sedan segment this fiscal on the back of its successful model Sx4.

The company, which has been focusing on becoming a full-scale player to outgrow its small-carmaker image as a part of parent Suzuki’s global strategy, has managed to grow 53.2 per cent in the A3 (mid-sized Sedan) segment during the April-February period.

According to the latest data by Society of Indian Automobile Manufacturers (SIAM), MSI’s sales in the period stood at 41,799 units as compared to 27,283 units in the same period last year.

The growth has enabled the company to speed past Honda Siel Cars India (HSCI), which was at the number one slot in April-February period of the previous fiscal. HSCI sells city, its popular model in the segment.

In the ongoing fiscal, HSCI’s cumulative sales stood at 34,029 units as against 35,300 units in the corresponding period last year.

Hyundai Motor India comes third in the segment with 29,146 units sold in the period as against 25,147 units a year ago. The company sells two models — Accent and Verna — in the category.

The fight for the fourth place in the segment is a close one, between Ford and Tata Motors that have respectively clocked sales of 26,485 units (down from 34,681 units last year) and 26,281 units (29,949 units last year) during the period.

Ford has Ikon, Fiesta and Fusion models in the segment, while Tata motors has Indigo and Indigo Marina.

Mahindra-Renault, which entered the segment with Logan, has so far managed to register sales of 22,823 units this fiscal.

MSI, which currently offers only the Sx4 in the segment after its entry level sedan esteem was discontinued, will be launching the Swift Dzire by the end of the month. The new model is expected to consolidate its position further in the segment.

Also, the company is working on a bigger Sedan, expected to be launched in 2009-10, to compete with the likes of Toyota Corolla and Skoda Octavia that come in a price bracket of Rs 10-12 lakh in the fast growing A4 segment. (PTI)

Steel minister plans to ask FM for removal of import duties

NEW DELHI, Mar 16: Peeved at steel producers hiking prices arbitrarily, steel ministry is planning to write to the Finance Ministry to remove import duties on steel and impose duty on its export, while pondering on a regulator in the sector.

"The steel producers have been hiking prices arbitrarily, which is a matter of serious concern to us. They need to realise that rising prices will adversely affect the `Aam Aadmi’. So we are planning to write to the Finance Ministry to examine the possibility of removing import duty on steel and imposing export duty on the alloy," a senior steel ministry official said.

He argued that repeated pleas to the steel producers to contain their prices have not yielded desired results and during the past one month they raised the prices of various products by Rs 3,000 to Rs 4,000 which would hit the ‘Aam Aadmi’ hard.

"Moreover, there is also a concern with the Government that the rising steel prices is also adversely affecting the wholesale price index," he reasoned.

Steel Minister Ram Vilas Paswan had couple of meetings with the producers in the past one month, in which he had urged them to roll back prices and desist from raising prices frequently.

"Inspite of his request, they hiked price in the first week of this month after a token reduction last month after the minister’s appeal," the official said.

It was not immediately clear as to what would be the export duty suggested by the ministry or whether it favoured abolishing import duty from the current five per cent for all steel products. (PTI)

ITAT makes trusts’ registration with IT dept easier

The Income Tax Appellate Tribunal (ITAT) in Devraha Baba Trust case held that department cannot reject the registration of application after the expiry of six months, even if it has raised some queries before the expiry of the six-month period.

" ...It is mandatory for the CIT (Commissioner of Income Tax) to dispose of the application for registration within six months from end of the month in which the application was filed," the order said.

In the Devaraha Baba Trust Case, the CIT refused registration to the trust after the expiry of six months, though it had initiated some enquiries within the stipulated period.

On an appeal by the trust against the decision of the CIT, the tribunal said, "the orders (for acceptance or rejection by the CIT) have to be passed within the time limit prescribed and if not, the application should be deemed to have been granted."

The ITAT further said that once the registration is granted, "there is nothing in law to prevent the CIT from making his own enquiries even after the expiry of time limit and making use of the results thereof to cancel the registration..."

Under the Income Tax Act, it is mandatory for a trust, set up for charitable or religious purposes, to get itself registered with the department to claim Income Tax exemptions. (PTI)

Deemed universities not to have free run in admissions

NEW DELHI, Mar 16: Deemed universities may not have a free run in admissions with the University Grants Commission (UGC) stipulating more stringent regulations for the purpose.

According to the draft regulations, universities can admit students only through an All-India Entrance Examination.

An expert committee set up by UGC has prepared a draft of UGC (institutions deemed to be universities) regulations, 2007, which lays guidelines for establishment, admission, fee and other operational mechanism of the deemed universities.

"The draft regulation has been sent to deemed universities for their comments. The regulation will be finalised once we get their views," a senior UGC official said.

As per the draft, the admission shall be made strictly on merit on an All-India basis through a common entrance test conducted either by UGC or by an institution identified and approved by it.

Admission to professional programmes like engineering, medical, dental, nursing, pharmacy, management, law and education shall be conducted as per the new regulation in consultation with the respective statutory bodies, it said.

The fee structure for various programmes of study in the deemed universities shall also be fixed in accordance with the regulations framed by UGC, said the expert committee headed by Prof K Ramamurthy Naidu. (PTI)

Ericsson, Samsung, Coca Cola owe crores to Govt in taxes

NEW DELHI, Mar 16: Indian arms of Ericsson, Daewoo Motors, Samsung and Coca Cola India figure among dozens of MNCs that have outstanding tax liability totalling over Rs 3,500 crore.

The revenue department, according to finance ministry figures, has to recover Rs 472.10 crore from Swedish telecommunications equipment maker Erricsson AB, Rs 442.72 crore from Daewoo Motors India and Rs 424.75 crore from Coca Cola India.

About three dozen MNCs operating in India have total outstanding tax liability of more than Rs 3,500 crore as of December 31, 2007, says the finance ministry figures on companies with tax arrears of more than Rs 25 crore.

The list of companies with high outstanding tax liability also include Samsung India Electronics (Rs 132.84 crore) and Star India Ltd (Rs 178.42 crore).

Other companies against which there is a large outstanding tax liability include Niko Resources (Rs 139.72 crore), Cartier Shipping (Rs 174.79 crore), A P Moller (Rs 113.10 crore) and Gracemac Cocon (Rs 136.49 crore).

The revenue department, according to official sources, has set up a task force to monitor recovery of arrears in cases involving large sums.

Besides, the ministry has also requested Settlement Commission for speedy disposal of high demand cases, they said.

The government has also requested the Income Tax Appellate Tribunal and Commissioners (Appeals) to expeditiously dispose of appeals involving substantial amount of arrears. (PTI)

UCO Bank shifts Rs 104 crore bad loans to three ARCs

MUMBAI, Mar 16: In a bid to clean up its balance sheet, public sector lender UCO Bank has sold Rs 60.36 crore of bad loans to three asset re-construction firms and plans to transfer another block worth Rs 44 crore this week, a top bank official said.

"The bank has already sold Rs 60.36 crore worth loans accumulated from 38 accounts. We plan to sell an additional Rs 44 crore worth of non-performing loans generated by 32 accounts in the next 2-3 days," UCO bank's Chairman and Managing Director S K Goel told PTI here.

The three asset re-construction companies (ARC) to which the lender has sold its bad loans are Asset Reconstruction Company India (Arcil), Arsec India and Dhir and Dhir Asset Reconstruction Company.

UCO Bank has put Rs 264 crore worth securitised bad loans on the block for sale with a view to bringing down its NPAs, now totalling around Rs 1,543 crore, Goel said.

This exercise will help the Kolkata-based lender get rid of its NPA burden partly and prepare itself to ramp up business expansion in the next fiscal, Goel said.

The bank also has plans to raise around Rs 325 crore through a preferential allotment of equity shares to institutional investors, which is likely this month.

UCO Bank has a headroom to raise a total of Rs 625 crore through perpetual non-cumulative preference issue this fiscal, Goel said. (PTI)

Cement prices to remain firm in medium-term: CMIE

MUMBAI, Mar 16: Cement prices are expected to remain firm in the medium-term owing to a continued buoyancy in demand, driven by housing and infrastructure sectors and cost pressure faced by cement companies, the Centre for Monitoring Indian Economy (CMIE) said in its monthly report.

Cement demand remained upbeat during April-January 2007-08, growing by a healthy 9.5 per cent against 9.9 per cent recorded in the year-ago period, CMIE said.

The average cement prices in Mumbai rose for the third consecutive month in February to reach Rs 249 per 50 kg bag.

"The proposal of the Railway Minister to cut freight on fly ash is not expected to have a significant impact on cement prices, as a very low proportion of fly ash is transported via rail," it said.

The Union Budget 2008-09 proposed to hike excise duty on clinker from the current Rs 350 per ton to Rs 450 a ton and to change excise duty on bulk cement from Rs 400 per ton to either 14 per cent ad valorem duty or duty of Rs 400 per ton, whichever is higher. (PTI)