Sinha signals tax breaks in budget for investment burst
Copyrights Act to be amended
ONGC readies plan for Bombay High renewal
Four in I-Win centre race

New Delhi, Dec 17: 
The forthcoming Union budget is likely to have tax breaks and other measures to attract more investment and help business grow at a fast clip, finance minister Yashwant Sinha said.

“The Prime Minister has directed me to prepare a budget which is forward looking, growth-oriented and investor friendly, ” Sinha said while addressing a meeting organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) here today.

Sinha also told industrialists present at the concluding session of the chamber’s annual general meet that the the indirect tax reforms initiated two years back would be carried forward in the next budget.

The government has already brought down the number and peak rates of import duties and excise on local produce, which are widely expected to be lowered further this year. Besides, steps are being taken towards introduction of a nationwide value added tax regime for all manufacturing and sales taxes.

He, however, indicated the surcharge on corporate and personal income tax could continue. At the same time, the planning process is being revamped and this would be reflected in the Tenth Plan.

The government is also working on a long-term perspective plan, he said.

The minister admitted the budgetary target of mopping up Rs 10,000 crore through disinvestment might not be achieved this fiscal.

He pointed out that public sector enterprises which are being put on the block this year are virtually being privatised because management control of these companies would be handed over to those who bought strategic stakes.

Sinha said delays in taking decisions on divestment in PSUs are inevitable.For example, the government had to face opposition from unions when it decided to amend the Bank Nationalisation Act which would have allowed it to dilute its equity to 33 per cent while retaining management control.

Sinha warned the process of second generation reforms, which included opening up of labour and financial markets and doing away with sops granted to small businesses, would be gradual.

“These are controversial issues. For every action we need legislative changes. We have to carry the Parliament along,” he added.

Listing his immediate priorities, Sinha said the government would introduce the Fiscal Responsibility Bill in the coming week. It would also work to bring before Parliament legislations such as the Electricity Act, Competition Policy and the Convergence Bill.

However, he was unable to spell out deadlines for tabling these Bills. He made it clear the government would not act in haste. “We will not rush the process,” he said.

Responding to criticism from barons that the government had allowed a flood of cheap consumer imports, Sinha categorically said his ministry’s studies revealed the extent of penetration by cheap products, imported or smuggled, was very limited and confined to a few markets in selected cities.


New Delhi, Dec 17: 
The government is considering amendments in the Copyrights and Trade Marks Act to combat counterfeiting, secretary in the Prime Minister’s office (PMO), N K Singh, said.

“The Act, once amended, will make counterfeiting a non-bailable offense,” Singh said while addressing the concluding session of the Ficci’s annual general meeting here today.

The government, he said, is likely to entrust the task of enforcement to the Central Board of Excise and Customs (CBEC) apart from the police agencies, he added.

Speaking at the summit, which was organised to discuss the road blocks to implementing reforms, Singh said counterfeiting is a menace because it hurts companies and deprives the government of a major share of its tax revenues.

Dwelling on the issue of labour laws, he said, “We need to put in place a uniform labour law.” In this context, he reiterated the Prime Minister’s sentiment that labour laws, while promoting existing labour, should not obstruct further employment of labour.

Earlier, P M Sinha, chairman of Pepsico Holdings Ltd, said the existing set of labour laws are restrictive in terms of employment because they do not encourage companies to offer fresh jobs. An employment-friendly regime from the employer’s perspective is necessary, which can be created with the help of changes in tax policies and fiscal reforms, he said.

Free flow of foreign money be allowed without Foreign Investment Promotion Board’s approval, as people are ready to take risk, said Sunil Mittal, chairman and group managing director of Bharti Enterprises. He added that the telecom sector is strong on policy but weak in implementation.

Acknowledging the need for policy implementation, Shyamal Ghosh, secretary, department of telecommunication said that this was an immediate need and a high powered committee has been set up with the four southern states to achieve the right of way for data passage without any additional charge.

Voicing the requirements of the power sector, Mukul Kalsiwal, director S Kumars said that the lack of an integrated long term plan was the bane of the power sector as also the menace of rampant power theft.

A K Basu, secretary in the ministry of power said that the new electricity bill, which is on the anvil, is very strict on power theft issue. He counted privatisation and rationalisation of tariff as major tasks ahead. He added that the poor state of the State Electricity Boards (SEB) has been seriously recognised only about a year back.

A Vellayan, managing director Tube Investments of India Ltd, urged the government to evolve a co-ordinated strategy for all issues related to the World Trade Organisation (WTO). “Increase threshold rate before China enters WTO and use it as a bargaining tool when China enters WTO,” he said. R V Kannoria, MD of Kannoria Chemicals and Industries also pointed the need to strengthen the anti-dumping cell of the government.

Vellayan urged that the domestic companies be exempted from excise on post manufacturing expenses like advertising.


New Delhi, Dec 17: 
The ONGC management has struck a compromise with the group of advisers to break the stalemate over the re-development of Bombay High North.

It has agreed to appoint the French company CFP to recommend Enhanced Oil Recovery (EOR) methods for Bombay High, even as ONGC goes ahead with implementing its own prescriptions. The French company’s recommendations could be implemented in the second phase. The re-development plan is expected to be cleared by the ONGC board shortly.

ONGC and its consultant, Gaffney, Cline and Associates, had decided on a water injection method to enhance oil recovery in Bombay High, convinced that this is the best method for the purpose. But the advisory council attached to the directorate of hydrocarbons differed with this prescription and recommended polymer injection as the right solution. All the members of this council are geologists who are not considered competent to advise on reservoir behaviour. However, the most articulate among the advisers did not consider Gaffney, Cline and Associates all that competent, preferring the French company.The ONGC management thought the best way to break the stalemate was to accommodate his preference.

ONGC had CFP of France, a Total group company,as consultant for Bombay High for nearly ten years. After the termination of the consultancy contract, CFP tried to stage a comeback with a report that ONGC has lost considerable oil during the period when it was not the consultant. With it began the process of maligning the previous management. However, the present consultant in Bombay High did not agree with the view that reservoir problems were due to mismanagement. Such reservoir problems had been witnessed in almost all major oil fields, it stated in a report.

Complicating matters is the presence of powerful lobbies both within and outside the country, trying to scuttle any plan to increase production from Bombay High and to project that only multinationals can do the job.

They almost succeeded when Captain Satish Sharma was the minister for petroleum. After ONGC rejected the unsolicited offer of Occidental, Sharma forced ONGC to invite a limited tender for a production sharing arrangement.

It shortlisted five bidders, none of which could make any commitment about the quantum of increase in crude production. In recent years, Marathon Oil Company, through a retired Tamil Nadu cadre IAS officer, had been lobbying for an entry into Bombay High.

He tried to influence former petroleum minister Vazhapadi Ramamurthy. However, the present incumbent Ram Naik does not seem amenable to pressures from multinationals.


Calcutta, Dec 17: 
I-win has shortlisted four parties for its proposed Millennium Convention Centre to be set up under Vidyasagar Setu on river Hooghly.

The parties which have been shortlisted by I-win are the Oberois (EIH Ltd), Park Hotel, Nicco Park and Resorts and the Merlin group. It expects to hand over the tender documents by early January.

I-win is a joint venture company in which ICICI holds 76 per cent and the West Bengal Industrial Development Corporation holding the rest 24 per cent. ICICI has also agreed to provide the necessary finance to the prospective bidders.

The convention centre will be set up on a build-own-transfer (BOT) basis and the state government will give a thirty years right to the BOT operator. The cost of the project estimated by I-win is Rs 30 crore. I-win had floated a pre-qualification bid in the middle 0f this year. “We had received about 10 bids of which four have been selected,” said D. Sengupta, chairman of I-win.

The convention centre will be set up on 12 pile caps under the Vidyasagar Setu, which gives an equivalent ground area of 50,000 square feet. The pile caps were erected during the construction of the bridge to install heavy equipment.

Sengupta said the process of transferring the land from Calcutta Port Trust to the state government has already begun. The project has received clearance from Hooghly River Bridge Commissioners and Howrah Municipality, he said.

The convention centre will be a multi-level complex with a total estimated built-up area of one lakh square feet. The first floor of the convention centre will house a 1,200 seater convention centre, six meeting rooms, business centre, post office and a bank branch.

The ground floor will have two to three restaurants, a bowling alley, a billiards table and a terrace garden.

The roof will house an open air theatre which will be covered by a fabric canopy to give it the appearance of the famed Millennium Dome. Mukul Mitra, a city-based architect, has worked out the concept plan for the centre.

The convention centre will be accessible both by road and by water, the former via Vidyasagar Setu, and the latter by a jetty. The project envisages setting up of a jetty along with the centre to enable tourists to visit the place by ferry boats.


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