Harmony in chamber budget music
Sebi meet to take stock of boom
Inflation rate plummets to 2.88%
Norms eased for forward trading in forex market
Police seek shelter in ricochet, suspension

New Delhi, Feb 13 
The industry’s most venerated voices have hit the same notes on key issues that affect the way India taxes its people, trades with other countries and draws the limits to the government’s presence in a rapidly changing economy.

The three apex chambers — CII, Ficci and Assocham — are not known to share views and good vibes but they all agree that finance minister Yashwant Sinha’s budget could demolish a common enemy — the10 per cent surcharge on corporate and personal income taxes levied last year. However, a government crimped for cash and short of options makes it unlikely that the levy will be tossed out. In fact, there are many in industry who acknowledge as much.

No one — least of all a government gasping for revenues — would be ready to surrender a device that generates Rs 5,500 crore annually. Not when the fiscal deficit is an alarming 5.5 per cent of the GDP. “Trade and industry have been lobbying hard for it but they are quite apprehensive whether such a tax will be removed,” an Assocham source said.

Ficci president G P Goenka is, however, upbeat about the budget: “The government has been giving positive indications. There are no reasons to feel apprehensive about anything.”

He has reasons enough to be happy. This time round, there are no major differences in the pre-budget memorandum submitted by CII, Ficci and Assocham. All of them want protectionist measures like raising customs duty to WTO-bound levels to counter the perceived threat from the phase-out of quantitative restrictions (QRs). Other items on the common wishlist include the removal of 10 per cent levy, lower interest rates and, of course, no new taxes.

India’s multilateral trade pact commitments require it to end QRs by April next year. Curbs on 1,429 items will have to go, including 700 items on the restricted list, 685 on the special import list and 44 on the canalised list.

Some industries are ill-prepared to face this eventuality. The CII has already started making noises about the possibility of cheap used-car imports swamping the market once the floodgates are unbolted. Food, liquor, and garment firms are among the others the industry fears will be swept away in the tide.

There are positive signs about what the budget is almost sure to offer. Industry, especially the CII, is certain that venture capital, drug R&D will be given a strong push through tax exemptions.

Another piece of agreement is that many new service sectors will be brought into the tax net to widen the tax base. “There are profitable services which should also share the tax burden,” Assocham president Shekhar Bajaj had said earlier. He has made it clear the industry is opposed to recapitalisation of tottering public sector banks through the budget. In other words, Assocham is railing against the M.S Verma Committee report which suggested a Rs 5,500-crore infusion.

“Fresh taxes on the industry to help raise funds for these purposes will be unacceptable. In fact, the government can pump in the money raised through divestment into these banks,” Bajaj says.

Ficci wants divestment to be delinked from the budget, saying the funds raised this way should be invested in infrastructure. However, most chambers want the selloff target should be raised to Rs 15,000 crore in the next fiscal.

The chambers are not too optimistic about efforts to tax rich farmers, even though Ficci and CII have highlighted it . Assocham has argued that a land-tax is a better idea than a farm levy, whichwould be arduous and expensive to collect. Nonetheless, the industry knows the issue is a political hot potato. They would rather keep off an idea that was first mooted in the 1970s but has remained little more than a debating plank.

Whether the pre-budget pulls and pressures succeed in shaping the budget remains to be seen. But, be sure of one thing: All of them will claim credit for whatever good comes of Sinha’s opus.    

Mumbai, Feb 13: 
Sebi has convened a meeting of stock exchanges tomorrow to discuss the astonishing jump in the value of the sensex which rose by 500 points in over five days of trading last week.

The sensitive index (sensex) of the Bombay Stock Exchange (BSE) started the week at 5431.55 and sky-rocketed past the 6,000 mark on Friday before closing at 5933.56, a gain of 502.01 points or 9.02 percentage over the week.

What is more remarkable is that the rise was achieved without any technical correction that has often brought down the value of the sensex.

Market watchers, however, believe that a technical correction is very much in the offing, and they expect financial institutions to book profit in a small way when trading resumes tomorrow.

Besides any announcement by Sebi tomorrow after its meeting with stock exchange officials might serve as a dampener to trading.

But this will only be temporary, as marketwatchers feel that the stock markets are all set to ride the Indian infotech wave that lashed the Nasdaq on Friday when both the ADR of Infosys Technologies (Infy) and Satyam Infoway (Sify) gained 26 per cent in a single day of trading.

Infy gained a whopping $ 141.56 to $ 670.06 from $ 528.5, while Sify jumped $20.06 to close at $ 74.9375 from $ 95.

The phenomenal jump in Infy and Sify share values were a case of bucking the trend as the Nasdaq index fell on Friday, pulled down by none other than software giant Microsoft. The Infy scrip had been rising since Wednesday on the Nasdaq. On Wednesday it gained $ 80, on Thursday it rose by $ 111.5 and on Friday it gained $ 141.56. The Infy scrip gain in rupees comes to Rs 58,456 as two of its ADRs make for one Infosys share. The Infosys scrip closed at Rs 9,225 on Friday on the BSE.

The rise in Infy ADR on Friday took place despite Infosys chairman Narayan Murthy issuing a statement to the stock exchanges saying he was not aware of the reasons behind the sharp rise in the company’s shares.

Brokers say the euphoria for Indian stocks on the Nasdaq will permeate on the local bourses. However, some brokers believe the Sebi strictures on the leading brokers of the country, after the sensex went on a overdrive last Friday, may act as a dampener.

Besides the comment of BJP idealogue Jagdish Shettigar, about the need to adopt harsh measures by the government, may not be taken kindly by the markets.

Contrary to fears, the total carry forward outstandings on the BSE inched up to Rs 3,899.49 crore from last week’s figure of Rs 3547.87 crore. “This is not alarming,’’ a dealer said, explaining that it should be seen in relation to the market capitalisation of all stocks.

In fact, the ITC counter saw its outstandings reduce from Rs 73.22 crore in the last week to Rs 66.69 crore; while MTNL, another gainer, saw its outstandings marginally decline to Rs 65.93 crore from Rs 67.36 crore.    

New Delhi, Feb 13: 
The inflation rate plummeted to 2.88 per cent for the week ended January 29, after a three-week spell over the three per cent mark, following a sharp fall in prices of major food articles.

The 0.43 percentage fall in the annual rate of inflation to 2.88 per cent (provisional) from 3.31 per cent (provisional) in the previous week was triggered off by a 0.2 per cent fall in the index of primary articles.

Inflation was, however, way higher at 4.82 per cent during the corresponding week last year. Inflation rate had risen to a 32-week high of 3.31 per cent for the week ended January 22 due to perceptible increase in prices of various primary articles.    

Mumbai, Feb 13 
The Reserve Bank of India has further liberalised foreign exchange (forex) transactions by permitting authorised dealers to enter into contracts for forward purchase and sale of foreign currency with resident Indians who have an underlying exposure to exchange risk in respect of genuine transactions permitted under the exchange control regulations.

Under the changes effected by RBI recently in its exchange control manual, choice of currency and tenor are left to the customer and where the exact amount could not be known owing to the rates/costs being linked to variable factors, contracts could be booked on the basis of reasonable estimate.

Maturity of a cover should not exceed the maturity of the underlying transaction, it warned and added, foreign currency loans/bonds would be eligible for cover only after final approval was accorded by it for the arrangement.

In respect of global depository receipts (GDRs), the issue price has to be finalised to be eligible for the cover.

Exchange earners foreign currency accounts could be sold forward by the account holders provided they were earmarked for delivery and such contracts could not be cancelled.

Contracts involving rupee as one of the currencies once cancelled could not be booked but only be rolled over at ongoing rates on or before maturity, the Reserve Bank said, adding that contracts covering export transactions could be cancelled, re-booked and rolled over at current rates.

Substitution of contracts covering trade transactions are permitted if the authorised dealer (AD) was satisfied of suitable documentary evidence, RBI said.

ADs could arrange foreign currency-rupee swaps between corporates who ran long-term foreign currency exposures.    

Calcutta, Feb. 13 

A day after trigger-happy constables fired at a fleeing lorry but killed a bus conductor in Nager Bazar, the police have claimed they are not poor shots.

A preliminary report on the incident has suggested that bus conductor Amarjit Singh might have been killed by a police bullet that ricocheted off the lorry’s tyres.

The report also hints at the possibility of Singh having been shot by one of the three men inside the truck.

The fleeing lorry also hit a cyclist, Shovan Adhikary, at Shyamnagar, near Bangur. Adhikary succumbed to his injuries on Sunday.

The initial report prepared by the North 24-Parganas district superintendent of police, Kuldeep Singh, said one of the three men sitting inside the truck had probably fired at the police jeep chasing them but there was as yet no conclusive evidence of this.

Singh later said four police officers were suspended. “They did not inform senior officers over the wireless while chasing the lorry. The constables opened fire on their own,’’ he added.

Recounting the circumstances that led to the incident, police sources said the owner of the lorry, Jarnail Singh, had borrowed Rs 2 lakh from Gurdev Singh in the Airport police station area to buy the lorry. Jarnail was not repaying the loan.

Police said Gurdev sent his men to Jarnail’s office on Friday urging him to return the amount. An argument broke out and an infuriated Jarnail sent his brother and two others to Gurdev’s office on Saturday evening. Police said Jarnail’s brother and his associate threatened Gurdev Singh and even fired two rounds from their revolver.

Gurdev Singh sought the protection of the Airport police station and registered a complaint. A police team was sent with Gurdev and his men to look for the lorry on the National Highway.

Police said Gurdev Singh identified the truck which was coming towards Calcutta from Barasat. The officers directed the driver to stop but he tried to flee. The police pursued the lorry in their jeep.

According to Kuldeep Singh’s report, the lorry entered the Nager Bazar area at high speed, with the police jeep in hot pursuit. The area was congested on Saturday evening. The crowd was on edge because of a rumour that the vehicle had crushed a man and was escaping.

Two police constables were on duty at Nager Bazar. According to the police report, the crowd urged the two constables to fire and puncture the tyres. Kuldeep Singh says in the report that there was an exchange of fire. Although witnesses confirmed that a bullet from a policeman’s rifle hit Amarjit Singh who was standing on the footboard of the bus, police officers refuse to accept that one of their men aimed badly.

“Jarnail Singh’s brother fired one round and the police retaliated by firing two rounds. Investigations by ballistic experts will reveal whose bullet killed Singh,’’ Kuldeep Singh said.

Nager Bazar was tense on Sunday but relatively trouble-free after Saturday night’s mob violence. Jessore Road was blocked in the morning for about two hours by protesters.

In street-corner meetings, CPM and Citu leaders accused the police of acting in haste. “They can’t aim properly. Why are they working in police?’’ asked Rabi Sarkar, a senior CPM leader.

Buses on route 219 did not ply on Sunday in protest against the killing.    


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