FM Sops To Hike Liquidity
October 16th, 2008 by admin | Comments Off | Filed in Auto, Business, Company, Components, Financial, Insurance, Machines, Marketing, SystemFM sops to hike liquidity
New Delhi, Oct. 15: The finance minister, Mr P. Chidambaram, on Wednesday announced more measures to ease the tight liquidity situation. These include, immediate package of Rs 25,000 crore to banks under farm waiver scheme and increase cap on foreign investment in corporate bonds.ῠ These steps came after a high-powered meeting chaired by the Prime Minister, Dr Manmohan Singh, on Tuesday, which discussed measures further required to be taken in view of the global financial crisis.
“Under the agricultural debt waiver and debt relief scheme, the government had agreed to provide a sum of Rs 25,000 crore as the first installment to the commercial banks, RRBs and cooperative credit institutions . It is felt that this money should be provided immediately,” said Mr Chidambaram.ῠ He said that on the request of the government, the RBI has agreed to provide this amount to the lending institutions immediately. The money made available to the commercial banks is Rs 7,500 crore and to the Nabard Rs 17,500 crore. There will be no requirement of providing collateral, said the finance minister.
Mr Chidambaram said that while Indian banks were well capitalised, they would be given access to funds to raise their capital adequacy ratio up to 12 per cent.ῠ “Our banks are well capitalised. Their CRARs are well above the basel norm of eight per cent and the RBI stipulated norm of nine per cent. No bank has a capital adequacy of less than 10 per cent,” said the finance minister.
He said that the details of the capitalisation scheme are being worked out. Mr Chidambaram said that the limit of FII investment in corporate bonds will be raised from $3 billion to $6 billion. “The Sebi has informed me that it will address any requests for relaxation in the proportion of investment in equity and debt required to be maintained by an FII under current regulations,” he said.
Mr Chidambaram said that after the Reserve Bank of India, the government is also issuing an advisory to public sector banks impressing upon them the need to ensure easy drawdown against sanctioned limits and continued active parti-cipation in the inter-bank call money market.
Sensex tanks 674 pts
Mumbai, Oct. 15: Weak global cues saw the market open down 250 points and the Sensex plunge further after the L&T results were out. They were below street expectations and raised fe-ars that the corporate res-ults which are yet to come would be on similar lines.ῠ Short selling in the L&T stock saw the stock loose Rs 110. “The stock was ruling around Rs 950 and a few seconds before the announcement of the results the stock went to Rs 942. There was heavy shorting in the stock and several other stocks like Reliance Infra and RCom,” said Mr Alok Agarwal, head, research, K.R. Choksey Securities.
No merger for Goyal, Mallya
Hyderabad, Oct. 15: The Jet Airways chairman, Mr Naresh Goyal and the Kingfisher Airlines chairman, Mr Vijay Mallya, on Wednesday ruled out merger of India’s top two private airlines.ῠ The two airlines account for about 60 per cent of the market share.
“There is no equity swap. Our understanding is for purely commercial all-iance,” Dr Mallya said. Speaking to the media, Mr Goyal said that the alliance is not a marriage of convenience and the consolidation in the aviation industry is inevitable.
He said, “It (alliance) had happened in the US and the Europe and it has happened for the first time in India.” He said that the rationalisation of routes, capacity and costs are essential for survival and that market share was not the answer to profitability.ῠ “There are instances where fighting for market share made the companies go bankrupt in the US,” he added.
Mr Goyal said that the break-even point for the aviation sector is at 90 per cent capacity utilisation, while the companies are operating between 60-70 per cent. “On top of this, international airlines are dumping capacity in India, lowering their prices knowing we cannot match the competition…. therefore we have to work together,” he said. On the lay-off of 850 Jet Airways’ employees, Mr Goyal said those employees were on probation and the company has just not extended the probation.
He said even Air-India can join the alliance, if wants. Later in the day, the Union civil aviation minister, Mr Praful Patel, said the government does not have any details of the deal. “In absence of such details, we cannot comment on it,” he added.ῠ However, he said the government will not have any problem, if the alliance is within the rules and regulations of the aviation ministry.
Crude falls to $76 bbl
London, Oct. 15: Oil prices fell on Wednesday to their lowest in 13 months, dragged down by expectations that economic weakness will cut further into demand for crude.ῠ The US crude was down $3.76 a barrel at $74.87 by 11:04 am EDT. It touched a session low of $74.62, its lowest since September last year. London Brent crude was $4.03 down at $70.50 a barrel. Stock markets also fell sharply and the dollar weakened against the yen as global recession fears returned to centrestage after governments around the world pledged trillions of dollars for bank bailouts.
A weak performance from the US retailers provided evidence of the slowdown. The retailers suffered their biggest monthly drop in sales in more than three years in September. Recession in the world’s top consumer the US and other key markets could further dam-pen oil demand.ῠῠ
Lodha’s son to claim Birla assets
HARSH VARDHAN Lodha would soon move Calcutta High Court seeking conversion of his father’s proceedings for the over Rs 5,000-crore M.P. Birla group assets, for which late Rajendra Singh Lodha had filed a probate application vide a will by Ms Priyamvada Birla. “Harsh Lodha will apply in the high court for conversion of Mr R.S. Lodha’s proceedings after it reopens following puja vacation,” said Mr Lodha’s counsel, Mr Debanjan Mondal. The Birlas and Rajendra Singh Lodha had been fighting a bitter legal battle over the M.P. Birla group assets with the probate petition pending in the high court.
Tatas to pay Rs 900/sq mt to Gujarat
THE GUJARAT government on Wednesday decided to charge Rs 900 per square meter from Tatas for the 1,100 acre land given for Nano Car Project in Sanand, officials sources said. The state cabinet meeting chaired by the chief minister, Mr Narendra Modi, took this decision on the basis of recommendation of state-level land valuation committee of the Gujarat government. Tata Group will have to pay Rs 400.65 crore for the 1,100 acres of the land at the rate of Rs 900 per square metre.
Tata Motors develops LPG trucks
COUNTRY’S BIGGEST truckmaker Tata Motors on Wednesday said its Korean commercial vehicle subsidiary has developed the prototype of the 4.5 tonne LPG truck in association with the Korean government. “The vehicle was developed by Tata Daewoo in association with the ministries of commerce, industry and energy, Korea Energy Management Corporation and a consortium of 12 organisations,” Tata Motors said in a statement. The first Korean LPG medium commercial vehicle would be of 4.5 tonne payload and would conform to EURO V emission norms, it added. The truck is powered with a Liquid Phase Injection engine.
No tax for RNOR
By Kamal Rathi
Q. I was a non-resident In-dian for the last ten financial years (1998-99 to 2007-2008) and stayed in India for only 370 days in that period. Further, I stayed for only 307 days in India during last seven financial years. Consider-ing this, can I avail benefit of Resident Not Ordinar-ily Resident (RNOR) status for three fiscal years?
Can I claim the benefit of tax free (as available to an NRI) interest for three financial year on my investments such as NRE deposits and FCNR deposits in view of my RNOR status. Kindly tell me, if such benefits are for two or three years, if I fulfil both the conditions.
I have to inform my banks to treat me as an RNOR and also treat my deposits as the same.
Do I have to file income tax return as Resident Not Ordinarily Resident (RNOR) showing interest income and claim rebate or filing tax return is not necessary?
Dwarkanath Narayan, Mysore, Via E-mail.
A. According to Section 6(6) of the Income Tax Act, a person is said to be “not ordinarily resident” in India in any previous year if such person is an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty nine days or less.
On the above facts, you will not be liable to tax on the income from investments outside India for two financial years 2008-09 and 2009-10, since you will be able to fulfil at least one condition laid down under Section 6(6), namely being a non resident for nine years during the ten years preceding the relevant financial year.
According to Section 139(1), an individual should furnish a return of income in the prescribed form, if his total income during the previous year exceeded the maximum amount which is not chargeable to income tax.
Hence, if your total income exceeds the threshold limit, you need to file income tax return. You will be entitled to claim the admissible deductions permissible under the provisions of Income Tax Act.
(Kamal Rathi is a chartered accountant, representing Rathi & Malani, a Hyderabad-based accounting firm. Readers can mail their queries on income-tax tokamalrathi.ca@gmail.com)
Honda eyes small car biz
Kolkata, Oct. 15: The Indian small car market will see yet another player entering the domain with the Japanese car manufacturer Honda designing a car for domestic consumption, the automobile maker said on Wednesday. “We are designing a small car which will be launched a few years down the line,”said Mr Jnaneswar Sen vice-president (marketing) Honda Siel Cars India, the Indian subsidiary of the Japanese company said here. The car would be placed in the B, B+ segment, Mr Sen said.
The company would launch a premium hatchback model by 2009 summer. The model has been named ‘Jazz’ and would have a engine capacity of 1200 cc, he said. Launching the new Honda City, Mr Sen said that the company’s second production base was coming up at Rajashthan and would be ready by the end of 2009. The company would make an investment of Rs 1,000 crore at its Rajashthan plant. The initial capacity would be 60,000 units per annum, which would be expanded up to two lakh units per annum. Last year, the company sold 62,000 units across all its models.
Quality’s name of game
Bengaluru, Oct. 15: While the old slogan of ‘come to us for cost and stay with us for quality’ still holds good for the Indian IT/ITES sector, it has marched way ahead and today plays a distinct role in enhancing the customers’ business outcome. This is accomplished by increasing the customer’s revenue, collections or market share and delivering a great customer experience. The question is, how important is the role of the ‘quality’ in the business of delivering customer delight? While the question seems like a no-brainer, the answer is somewhat startling, as this correspondent discovered, at the fourth edition of the two-day, Nasscom Quality Summit, 2008 which opened in the city on Wednesday.
Says Arjun Singh, CEO (BFSI), WNS Global Services P Ltd: “While it is clear to most people the world over, that by adopting Six Sigma, corporations can save zillions of dollars by allowing for better product development, quicker time-to-market, improved processes and delivering customer delight, the stark reality in the Indian context is that companies in the BPO space score a measly three out of ten when it comes to adopting the power of Six Sigma. The problem lies in the fact that business leaders seldom buy into the Six Sigma strategy, even when it is obvious that it has the power to transform the way businesses are done.” Six Sigma is a business management strategy that uses a set of quality management methods, including statistical methods, which seeks to identify and remove the causes of defects and errors in business processes.
While most organisations continually implement quality practices, they are faced with practical challenges along the way. “One major issue I have to contend with is the fact that the quality team in my company are mere matrix collectors and do not concern themselves with the nuances of delivering product quality. What is actually required is for them to interpret the matrices and for this they need domain expertise. This is rarely the case, as most experts consider the quality function unglamorous,” said Rajiv Mody, chairman, Sasken. Quality is an absolutely strategic function, even in times of a financial meltdown or a storm in a business cycle, because it ultimately reflects in the value delivered to the customer. Even as most companies consider ‘process quality’ an absolute hygiene factor on which ‘product quality’ is built, there is a dire need for quality to be incorporated at every stage in the product development lifecycle.
“Companies create different departments to handle different functions. But quality as a function cannot be the responsibility of one department alone,” said N Chandrasekaran, COO & executive director, TCS.
Bobby Mitra, MD, Texas Instruments, agrees. “If quality is relegated to one department then checks tend to become sloppy. Quality needs to be a part of every deliverable because there is no God at the end to check it for all defects, which get introduced into the product at every level.”
Belt-tightening ahead for IT
New York, Oct.15: On Wall Street, the prices of shares in technology companies have been bouncing around even more than most other industry sectors. Tech stocks were battered on Tuesday, driving down the overall market.
The picture is mixed and uncertain. But based on the early readings before quarterly earnings begin in earnest soon. IBM, surrounded by rumours of weakness, announced its third-quarter results in advance last week, beating analysts’ estimates. Oracle, too, says it is holding up fine. But SAP, the enterprise software maker, and Rackable Systems, which supplies server computers to big Web companies and many smaller businesses, recently lowered guidance for the quarter.
Gartner this week presented its information technology spending projections for 2009, and it sees the souring economy taking a toll. Its worst-case projection (incr-easingly likely, it seems) places worldwide growth in technology spending at 2.3 per cent for 2009, down from 5.8 per cent previously. Stronger Asian markets like China are propping up the overall numbers. In North America, Gartner sees spending growth at half a per cent in 2009, down from 5.3 per cent previously.
In an interview, Peter Sondergaard, Gartner’s senior vice president for global research, explained that information technology was now so integral a part of business operations that spending was no longer going to be much higher or lower than the broad economy. “This isn’t like the 2000 to 2002 period, when much of the world lost confidence in IT,” he said.
Horizons will shorten, and projects that can wait likely will. “CIOs have to learn to think like CFOs,” he explained, using the common shorthand for chief information officers and chief financial officers. At a conference this week, Mr. Sondergaard offered a “top 10″ list for squeezing more out of tight budget dollars. In the spirit of the new austerity, we’ll just give you the top five (the bottom five don’t add much):
1. Reduce headcount and freeze hiring.
2. Curtail data center expansions and “virtualise” servers, putting more software loads on fewer machines. 3. Renegotiate with technology and services suppliers.
4. Consolidate functions and systems to achieve greater economies of scale.
5. Outsource commodity services.
It’s enough to warm any CFO’s heart.
Diagnose biz gains traction
Bengaluru, Oct. 15: On a computer monitor in his office in the high-tech hub of Bengaluru, Indian radiologist Arjun Kalyanpur examines a scan of the skull of a six-year-old boy who fell off his bicycle. A few minutes later, thousands of miles away, doctors at a hospital in Philadelphia prepare the boy for surgery after receiving an urgent email from Kalyanpur diagnosing a subdural hemorrhage in the child’s brain.
It’s the middle of the night in the United States, but it’s daytime in Bangalore and Kalyanpur and his team of 35 radiologists are reading hundreds of scans sent by hospitals across the United States during the night shift. “ERs in the U.S. find it difficult to staff at night. There’s a radiologist shortage in the U.S. as well,” Kalyanpur said.
Bangalore, the outsourcing capital of the world, is becoming a global center for telemedicine thanks to a pool of Western educated doctors, extensive outsourcing infrastructure, lower costs and a convenient time zone to diagnose medical conditions during the U.S. night. Teleradiologists in India read X-rays, CT scans, magnetic resonance imaging and other medical images of patients in the United States, Singapore and a host of other countries around the world.
It’s ideal for hospitals facing ballooning costs and a shortage of radiologists. And it’s not just teleradiology, experts say just about every area of medicine that does not require direct patient interaction could be outsourced in the future. This could include scans of pathology samples, ECGs, EEGs and other diagnostic systems used to determine a preliminary diagnosis.
“Telemedicine is on the rise,” said Avinash Vashistha, the CEO of Tholon Inc, a private equity advisory firm, who has written a book about outsourcing. “Once it acquires critical mass in 2 to 3 years, we expect the thrust to come from insurance companies as they recognise the cost benefits and lower premiums for the plans that have components of telemedicine.” There are some concerns, though, that it might lead to dangerous misdiagnosis and even those in the industry admit that regulation hasn’t caught up with technology when it comes to medical malpractice, ethics and legal liability.
Liability, privacy and malpractice issues pose challenges as this new industry expands without a supporting international regulatory framework as well as an ethical code of conduct. “In the end the challenge really is when you’re doing something for the U.S. and something happens, who’s liable for it?,” said Vashistha. The business is lucrative and already there are 10 or more teleradiology firms in India as well as several in the United States, some of which are listed companies.
Deccan Chronicle