Ficci campaign for rational tax regime
Zee to pick up 40% in Jindal media company
JK Ind net dips 12% in Q2

New Delhi, Oct 21: 
The Federation of Indian Chambers of Commerce and Industry’s (Ficci) prescription for faster growth of the Indian economy hinges solely around the vexed tax issue.

Ficci, in its action plan for reviving the economy submitted to finance minister Yashwant Sinha today, sought a rationalised and more effective tax administration. The chamber said taxes should be rationalised and tax administration made more effective, to bring the unorganised sector and spurious manufacturers under the tax net. It also asked the government to revive the demand for steel and cement by increasing spend on large infrastructure projects.

Ficci’s prescription, though not entirely at odds, is at variance with the Confederation of Indian Industry’s (CII) demand that policy sops be doled out to help boost sales of sunrise industries like automobiles.

Ficci said a hike in sales tax and excise duty has led to the emergence of spurious brands and the mushrooming of the unorganised sector. This, it contended, was hurting the organised sector.

On revamping the tax structure Ficci has suggested introduction of a value-added tax (VAT). “Till the time VAT is introduced, a meeting of the state finance ministers should be convened to discuss and solve the current problems on sales tax,” it added.

To spur growth in the core sectors of steel and cement, the chamber has recommended stepping up of investments in infrastructure.

“Specifically attention has to be paid on expenditure in favour of capital creation and project investment,” it said.

The chamber said that contracts for 3000 kms of the golden quadrilateral project should be given immediately, while those for the balance 2000 kms should be finalised by February next year. Finalisation of these two projects can bring about a seminal change in the economy, said the chamber.

“The government needs to kick-start all pending power projects by providing them incentive package, which includes structured payment of guarantees and speedy clearance procedures,” said Ficci.

It also needs to formulate alternate escrow mechanisms to kick-start IPP projects because the states do not have sufficient escrowable capacity to guarantee payment to IPPs for the power they generate.

Ficci has also recommended structural reforms and augmentation of capital formation in agriculture. While rural India accounts for over 55 per cent of the total consumption of FMCGs, sharp fluctuations in agricultural production has introduced an element of volatility in such demand. To give a boost to the agro-processing industry, Ficci has recommended creation of a national task force to coordinate between the various ministries.

Ficci also said it was essential to re-examine the options for tarriff escalation within permissible levels for segments that are witnessing sluggish demand and are faced with the invasion of cheaper imports.    

Mumbai, Oct 21: 
Subhash Chandra promoted Essel group of companies will support Vijay Jindal, former managing director of Zee Telefilms Ltd (ZTL), to set up a media investment company with an initial capital of Rs 10 crore.

Zee Telefilms Ltd (ZTL) will hold a 40 per cent stake and the rest would vest with Jindal, who would bring in Rs 6 crore as his share in the new venture, the company said in a release here today.

Following this, he would be relieved from executive responsibilities of the company and be an advisor to the promoter shareholder for a three year period, it said.

The board, at its meeting held yesterday, agreed to abolish the post of the managing director and appointed Deepak Shourie, R K Singh and Dev Naganand as wholetime directors, it added.

Jindal is credited with successfully managing the company between the year 1996 to the year 1999 in an entrepreneurial style.    

New Delhi, Oct 21: 
Hit by higher input costs, J K Industries saw a slide in profits for the second quarter of the current fiscal. It turned in a net profit of Rs 6.07 crore, down 12 per cent from Rs 6.87 crore in the previous corresponding quarter.

Announcing the unaudited financial results for the second quarter, finance director A.K. Kinra, said that the performance of the company has been considerably hampered by the increase in the prices of petroleum and fuel prices.

“Since 60 per cent of raw materials are petro-based, the rise in petro product prices took its toll on our profits, with raw material costs increasing by four per cent,” Kinra said.

Net sales for the second quarter of the current fiscal recorded a marginal 3.53 per cent growth to Rs 326.30 crore.

Net profit for the half year ended September 30 improved by 0.73 per cent to stand at Rs 16.54 crore, from the previous year’s figure of Rs 16.42 crore.

The interest cost of the company dropped by 8 per cent in the first half of the current fiscal, despite hardened interest rates, he said.

Total expenditure shot up to Rs 292.88 crore in the second quarter, as against Rs 279.19 in the previous comparable quarter.

Tyre exports have been maintained at Rs 63 crore, the same as last year.

Kinra said that in the bus and truck tyre markets, which were the mainstay of the company, JK Tyres has about 22 per cent of the market share.    


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