NEW DELHI: Reliance Communications-controlled FLAG Telecom has filed a prospectus in the Singapore Stock Exchange to list and divest 75 per cent stake in the submarine cables business for $1.25-1.5 billion (Rs 6,250-7,500 crore). The transaction is expected to be completed by the second week of May, according to the prospectus filed on Friday. The money being raised by the Anil Ambani group company will be used to reduce the debt on Reliance Communication’s books. The telecom company has a total debt of Rs 35,000 crore. The bankers for the issue include Deutsche Bank, DBS of Singapore, Standard Chartered and Industrial & Commercial Bank of China. A spokesperson of Reliance Communications, however, declined to comment on the issue. FLAG’s submarine assets and business will continue to be controlled by the existing management, ensuring continuity in operations, according to international banking sources involved with the prospectus. (For details log on to : http://www.business-standard.com/india/news/flag-telecom-to-list-divest-75-for-125-15-bn/468225/)
PEs TO PICK 74% IN IL&FS POWER PLANT FOR R4K CRORE
MUMBAI: Singapore-based Ascol, a consortium of four private equity funds, will purchase 74% in IL&FS Tamil Nadu Power Company for R4,000 crore, a person with direct knowledge of the development said. The company is building a 3,600-MW coal-fired power plant in Cuddalore in Tamil Nadu. India’s leading financial services provider IL&FS owns IL&FS Energy Development Company (IEDCL), the promoter of the power company. The company needs to invest roughly R18,000 crore over the next four years to build its full capacity. “We need to spend roughly R5 crore to produce a megawatt of power with imported coal,” the same person said. After firing the first phase of 1,200 MW by 2014, the power plant will add 800 MW every six months. The stake purchase signals overseas investors’ interest in new power plants which have government clearances and fuel supply security. For some time, these investors were skipping power projects as uncertainty on coal linkages and regulatory delays push up costs and delay financial closure. (For details log on to : http://www.financialexpress.com/news/pes-to-pick-74-in-il&fs-power-plant-for-r4k-cr/925463/)
BUDGET 2012: CHANGE WON’T AFFECT FDI FROM MAURITIUS
NEW DELHI: The finance ministry has said that the Budget change in the residency law will not affect investments from Mauritius, source of maximum foreign direct investment into India, but investments inflows through other countries could face heat. The Budget for 2012-13 announced last week says tax residency certificate from the host nation will not be sufficient for availing benefits under a double taxation avoidance agreement. “There is no issue with regard to investors from Mauritiusa¦the circular will prevail,” said a finance ministry official. The Central Board of Direct Taxes circular, issued in 2000, states that a certificate of residence issued by Mauritian authorities would be adequate proof of residence in Mauritiusand no further enquiries could be made. (For details log on to : http://economictimes.indiatimes.com/news/economy/foreign-trade/budget-2012-change-wont-affect-fdi-from-mauritius/articleshow/12322716.cms)
HEALTHCARE CHAINS EXPLORE CONVERSION OF LUXURY HOTELS INTO HOSPITALS
NEW DELHI: At least two healthcare chains in the country are exploring an opportunity to convert a luxury hotel into a hospital in Pune, it is learnt. Fortis Healthcare and ManipalHospitals, both keen to set up large multi-specialty hospitals in the Maharashtrian city, have shown interest in acquiring the sprawling Grand Hyatt Pune for the purpose, according to an industry source close to the development. Spread over 450,000 sq ft built-up area, Grand Hyatt Pune is still under construction. The trend of converting hotels into hospitals or residential complexes is popular in international markets, mainly the US. In India, it is being explored only now, according to HVS, a consulting firm specialising in hospitality. A Fortis Healthcare spokesperson said the superspeciality chain had a number of projects under discussion or underway in several cities. “However, we would prefer to speak about them only when we are ready to,” he told Business Standard. (For details log on to : http://www.business-standard.com/india/news/healthcare-chains-explore-conversionluxury-hotels-into-hospitals/468216/)
IFC TO INVEST $60 MN IN APOLLO HOSPITALS
CHENNAI: Apollo Hospitals Enterprises Limited (AHEL) is planning to raise $60 million from the International Finance Corporation (IFC). The fund raising is aimed to partially fund the hospital chain’s investment plan of $394 million. Besides, Apollo is planning to enter Tanzania, Zambiaand Rwanda, countries with middle and lower income, through an asset-light model. IFC’s expertise and industry relationships in such countries would bring value addition that is unavailable from other investors, according to IFC. It also plans to enter business segments, such as medical education. The 1979-founded AHEL is one of the largest integrated private healthcare groups in the country, with 5,888 beds. The proposed investment of $394 million, over the next four years, targets to add about 2,900 beds to the network and for equipment purchases for the existing hospitals and to expand the chain’s network of “Reach” hospitals, which focus on smaller and simpler facilities in less developed population centres. (For details log on to : http://www.business-standard.com/india/news/ifc-to-invest-60-mn-in-apollo-hospitals/468218/)
BHARAT DYNAMICS MAKES RS 34K-CRORE PLANS
CHENNAI/HYDERABAD: Hyderabad-based public sector undertaking, Bharat Dynamics Limited (BDL), is ready with proposals worth Rs 34,000 crore during the 12th and 13th Five-Year Plans. These will result in the development of the areas as well as provide employment to the people, according to Union minister of state for defence, MM Pallam Raju. “Jobs in the defence establishments will be provided through nationwide competitive exams. Therefore, engineering colleges need to provide training to their students to compete in the exams,” he said. Speaking at the foundation stone laying ceremony for the surface-to-air missile project organised by BDL here on Sunday, the minister hoped that BDL would achieve a turnover of $1 billion (approximately Rs 5,000 crore) in the next four to five years. “Missile units are being set up in Medak, Visakhapatnamand Ibrahimpatnam. The production of missiles will begin once the acceptancy tests are completed by the Army, Navy and Air Force at various levels. Cooperation is being taken from two countries for technology transfer,” the minister said. (For details log on to : http://www.business-standard.com/india/news/bharat-dynamics-makes-rs-34k-cr-plans/468177/)
ONGC PLANS CAPEX OF RS 33,065 CRORE FOR NEXT FISCAL
NEW DELHI: State-owned Oil and Natural Gas Corp (ONGC) plans to invest over Rs 33,065 crore next fiscal in exploration and production of oil and gas, a 5 per cent increase over capital expenditure in 2011-12. ONGC will invest Rs 33,065.31 crore in 2012-13 as compared to Rs 31,316 crore capex for current fiscal, according to 2012-13 Budget documents. All of this expenditure will be funded by ONGC from its internal resources. State refiner Indian Oil Corp (IOC) has scaled down its capex for next fiscal to Rs 10,000 crore as against a spending of Rs 11,000 crore in current year. Next year’s spending includes Rs 8,900 crore on its core refining and marketing business and Rs 650 crore in oil and gas exploration. The remaining Rs 450 crore would be spent on petrochemicals business. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/ongc-plans-capex-of-rs-33065-crore-for-next-fiscal/articleshow/12315194.cms)
RIO TINTO IS GEARING UP TO DEVELOP INDIA’S SECOND DIAMOND MINE IN BUNDELKHAND
You could mistake the porous piece of rock jutting out from a rivulet in the teak forests of Chhatarpur, Madhya Pradesh, for just that – a piece of rock. But that could be a million-dollar omission. Last month, 35 top geologists from across the world were queuing up to be snapped against it. The outcrop, as they call it in geological terminology, could potentially mean the Next Big Thing in diamond mining. Moneybags from Australian mining behemoth Rio Tinto are rolling up their sleeves, praying that somewhere scattered among the dirt and rock in the 954-sq km area could be the next Koh-i-Noor. All this in the heart of Bundelkhand, where banditry is considered an acceptable option for survival. (For details log onto : http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/metals-mining/rio-tinto-is-gearing-up-to-develop-indias-second-diamond-mine-in-bundelkhand/articleshow/12309922.cms)
ADITYA BIRLA GROUP TO INVEST RS 400 CRORE MORE IN RETAIL POST-SLOWDOWN
MUMBAI: The Aditya Birla group chairman Kumar Mangalam Birla will fork out a small fraction of his personal wealth to rapidly ramp up operations of the food retail business which is recovering from huge losses after the economic slowdown curtailed heavy consumer spending. The 44-year-old head of the metal-to-retail conglomerate will invest Rs 400 crore over the next two years mainly to set up hypermarkets that sell everything from pasta to detergents under one roof. Kumar Mangalam Birla with a net worth of $7.7 billion emerged as the sixth richest Indian in the list of billionaires published by the Forbes group in March 2012. Aditya Birla Retail, an unlisted company owned by Kumar Mangalam Birla, will set up 15-18 hypermarkets, hoping to catch up with the frenetic expansion unleashed by rivals Future Group and Reliance Retail. Future group’s hypermarket chain Big Bazaar run 138 stores across the country. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/aditya-birla-group-chairman-kumar-mangalam-birla-to-invest-rs-400-crore-more-in-retail-post-slowdown/articleshow/12321500.cms)
FOREIGN DIRECT INVESTMENT TOO CAN BRING NGO-TYPE ACTIVISM
This piece is not yet another article about the Union Budget presented last week. However, it will start by noting the finance minister’s statement that he still hopes to raise as much as Rs 30,000 crores by disinvesting government stake in state-owned companies – a bit lower than the Rs 40,000 crores targeted last year, but yet, sizeable. Interestingly, just days before the finance minister made this estimate public, The Children’s Investment Fund, a UK-based hedge fund whose profits go to charity, issued a legal notice to Coal India Ltd, a listed state-owned company. Despite being a listed company, Coal Indiahad rolled back a well-considered hike in coal prices at the bidding of the government. The fund has threatened legal action against the directors on the board of Coal Indiafor breach of fiduciary duty to public shareholders. Just days before the first ever legal threat was issued to any listed public sector company, the government was hitting out hard at social activism. The government’s chief executive Manmohan Singh made a statement about the “foreign hand” being behind the opposition from non-governmental organisations (“NGOs”) to the nuclear plant at Koodankulam. Taking the cue, the home ministry cracked down on NGOs, freezing bank accounts of a few, and this triggered the chatterrati to speak up against “anti-development NGOs”. (For details log on to : http://www.business-standard.com/india/news/foreign-direct-investment-too-can-bring-ngo-type-activism-/468168/)
PE FIRM ABRAAJ SET FOR MORE DEALS, EYES INDIA
DUBAI: Abraaj Capital, the West Asia’s largest private equity firm, is set to unveil more deal-making soon and plans a major push into India. “In the next couple of months, we will call you guys again and again because we have a robust pipeline that is reaching completion,” founder and group chief executive Arif Naqvi told Reuters in an interview. “We are in the process of completing investments – two or three investments,” said the 51-year-old Pakistani who is leading Abraaj’s drive to become an emerging market powerhouse. “2012 is the fruit of efforts made in 2011.” Dubai-based Abraaj, founded a decade ago, has raised $7 billion since its inception. It owns stakes in a range of Middle East companies including Orascom Construction, budget carrier Air Arabia, supermarket Spinneys and education group GEMS. (For details log on to : http://www.business-standard.com/india/news/pe-firm-abraaj-set-for-more-deals-eyes-india/160793/on)
CONSUMPTION OF PREMIUM LIQUOR ON THE RISE IN INDIA
BANGALORE: Mahesh Patel, a whisky collector, paid $94,000, or about Rs.47 lakh, last week at a charity auction in New Yorkfor a bottle of Glenfiddich Janet Sheed Roberts Reserve, a rare 55-year-old single malt Scotch. Some months ago, in separate instances, two Indians bought two limited luxury edition bottles of Dalmore 64 Trinitas, worth £100,000 each. Another connoisseur in Indiaforked out a fortune on two bottles of Dom Pérignon of 1969 vintage for someone born that year. Increasingly, bars at homes in Indiaare seeing fancy, luxe brands added to the cabinet. Even liquor stores no longer stack just rows and rows of Bagpiper and McDowell, which are value whisky brands. Premium brands are prominently displayed, but luxury labels, considered a rung above, are found only at select liquor vends. (For details log on to : http://www.livemint.com/2012/03/18224015/Consumption-of-premium-liquor.html?atype=tp)
WAREHOUSES GIVE WAY TO MEGA LOGISTICS PARKS
MUMBAI: Simple storage godowns or warehouses in the country are making way for big logistics parks that are not only getting private equity (PE) funds, but are also catching the fancy of Indian companies. Abhijit Malkani, managing director at Realterm Everstone Development Management Pvt. Ltd, said his $240 million fund was raised by PE firms Realterm Global and Everstone Capital in mid-2010 to start IndoSpace Logistics Parks Ltd, which will invest in logistics parks in India. “We are planning one more fund, considering the demand,” said Malkani. Brian Oravec, chief executive officer at Realterm Everstone, reasoned that “current warehouses are below standards and it is difficult to get insurance cover for such projects”. “We are building three logistics parks in 6 million sq. ft in Pune, Chennai and Delhi. We are planning four more,” he added. The idea is to create a world-class logistics park and sell it retailers and other clients similar to a developer who builds residential complexes. (For details log on to : http://www.livemint.com/2012/03/18224052/Warehouses-give-way-to-mega-lo.html?atype=tp)
HIGHER DUTY TO HIT AUTO MAKERS IN EXCISE-FREE ZONES
MUMBAI: India’s excise-free zones will not shield auto makers from the impact of higher excise levy proposed in the budget, as firms in the enclaves are not eligible to claim the modified value-added tax (Modvat) on buying parts and aggregates from vendors as they are already enjoying excise rebates, unlike others who do not operate from such areas. Analysts said this will affect firms such as Mahindra and Mahindra Ltd (M&M), Ashok Leyland Ltd, Hero MotoCorp Ltd and Bajaj Auto Ltd. Few others, including Maruti Suzuki India Ltd, Hyundai Motor India Ltd and Honda Motorcycles and Scooter India Pvt. Ltd, will not be affected. Modvat is a scheme that allows relief to manufacturers of finished products on excise duty borne by suppliers related to goods made by them. When a factory is located in an excise-free zone, any increase in the cost of purchase will have to be borne solely by the manufacturer. With the vendors likely to pass the 2% hike in excise duty proposed in the budget, the input costs for the manufacturers will go up and this will make production in these enclaves less attractive. (For details log on to : http://www.livemint.com/2012/03/18202641/Higher-duty-to-hit-auto-makers.html?atype=tp)
POWER FIRMS MAY HAVE TO PASS ON DUTY WAIVER BENEFIT TO CONSUMERS
MUMBAI: Electricity costs are set to drop for many consumers after the government proposed waiving the 5% customs duty on imported coal. Power companies, though, will gain little. Under provisions in the power purchase agreements (PPAs), companies including Tata Power Co. Ltd, Reliance Power Ltd, Adani Power Ltd and JSW Energy Ltd will have to pass on the benefit of the customs duty waiver to consumers, say experts. In the Union budget for 2012-13, finance minister Pranab Mukherjee on Friday proposed abolishing the 5% duty on imported coal to provide relief to power companies struggling with high prices of imported coal. “All the PPAs have a standard clause which says any benefit or burden arising out of changes in Indian laws will be passed on to the consumers,” said Shantanu Dixit of Pune-based Prayas Energy Group, which researches policy issues related to the energy sector. “So, in this case, the gain these companies might get due to the import duty waiver will have to be passed on to the consumers.” (For details log on to : http://www.livemint.com/2012/03/18230554/Firms-may-have-to-pass-on-duty.html?atype=tp)
RS 2 LAKH-CRORE OIL LOSSES NEXT YEAR MAY PLAY HAVOC WITH GOVT PLANS
NEW DELHI: The government’s plans to reign in petroleum subsidies to plug the fiscal deficit next financial year are in jeopardy, as a whopping Rs 2.13 lakh-crore revenue loss is expected at the current levels of global crude oil prices and domestic retail prices of controlled products. Non-revision of diesel, LPG and kerosene prices, firm crude oil prices and a weak rupee may combine to foil Finance Minister Pranab Mukherjee’s subsidy-reduction plans. Mukherjee has provided Rs 40,000 crore towards compensating oil marketing companies for losses on the three controlled products next year but the companies see their under-recoveries hitting an all-time high of Rs 2.13 lakh crore if prices are not raised and crude oil remains around $125 a barrel. “The Budget provides little scope for meeting the under-recoveries of oil marketing companies. Even if the current formula is continued for the next fiscal, the government’s share of Rs 1.32 lakh crore at 62.1 per cent of Rs 2.13 lakh crore will be much higher than provided in the Budget. It is not a good Budget for us,” said P K Goyal, director (finance), Indian Oil Corporation. (For details log on to : http://www.business-standard.com/india/news/rs-2-lakh-crore-oil-losses-next-year-may-play-havocgovt-plans/468227/)
PANDORA’S BOX OPENS WITH DOMESTIC TRANSFER PRICING
MUMBAI: Having tasted blood with huge transfer pricing orders slapped on companies with cross-border operations this financial year, the finance minister has cast his net wider and deeper for the next one. Budget announcements will substantially expand the scope of transfer pricing (TP) provisions by including domestic transactions for the first time. Transfer pricing is a new international area of taxation affecting large companies. “The tax base (for transfer pricing) will simply double. Earlier, it was only cross-border transactions of multinationals. Now, it will cover all related party transactions. For multinationals, compliance doubles as they have to report even transactions between their domestic arms,” said Ajit Tolani, associate partner, Economic Laws Practice. The move would impact companies that operate units in Special Economic Zones (SEZ) and park the bulk of their profits in these to take advantage of the tax holidays applicable. Real estate firms, which route transactions through hundreds of subsidiaries and associate companies, will also need to comply with transfer pricing documentation and reporting norms. (For details log on to : http://www.business-standard.com/india/news/pandoras-box-opensdomestic-transfer-pricing/468223/)
POWER COMPANIES SEEK MORE POLICY INITIATIVES
MUMBAI: The private power producers are happy with the announcement of a slew of goodies for the sector in the Budget, but unanimously say that it makes only a marginal difference and a lot more needs to be done. They now want the government to take policy initiatives, regulators to allow steep tariff hikes, state utilities to set their house in order and companies, like Coal India, ONGC and Reliance Industries, to produce more fuel as the country is running out of coal and natural gas needed for new power plants. “As far as power is concerned, there is a recognition that power will be one of the levers for growth, and some of the issues of the power sector have been addressed,” said Sanjiv Goenka, chairman of the RP-Sanjiv Goenka Group and vice-chairman, CESC Ltd. Industry officials say that the budget proposals have paved the way for policy action. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/energy/power/budget-2012-power-companies-seek-more-policy-initiatives/articleshow/12321751.cms)
CONSUMER FIRMS TO BE CAUTIOUS ON PRICING
MUMBAI: When Reserve Bank of IndiaGovernor D Subbarao said last week that India’s Inc pricing power had declined, he wasn’t off the mark. The Budgetary proposal to raise excise duty by two per cent this year will see product prices shooting up, but not substantially. FMCG (fast moving consumer goods) and durables companies say the effective price rise following the increase in excise duty will be lower than two per cent — at about 1-1.5 per cent only. And, most will not kick in immediately. Durables companies are likely to take up prices only by next month, while FMCG companies are likely to be even slower on the pricing front. “We are price followers, not leaders,” says A Mahendran, managing director, Godrej Consumer Products Ltd. “I don’t expect the hikes to kick in rightaway.” (For details log on to : http://www.business-standard.com/india/news/consumer-firms-to-be-cautiouspricing/468217/)
TAX RISE FOR FOREIGN ENTERTAINERS, SPORTSPERSONS MAY AFFECT IPL
MUMBAI: Foreign actors, musicians, sports personalities including Indian Premier League (IPL) players, and even producers may be part of a growing tribe that is attracted to the country’s booming entertainment industry. But now they are set to see a dent in their earnings in India, after the Union government proposed to double their tax to 20 per cent. “This will have implications on foreign sportspersons taking part in IPL, World Series Hockey and other sports league which have started in the last few years,” said Rakesh Jariwala, partner & tax expert, M&E, Ernst & Young. “Even overseas artists who participate in TV shows, films and advertisement commercials will be burdened with this.” This Budget proposal, which will come into effect from this July 1, says “income arising to a non-citizen, non-resident entertainer (such as theatre, radio or television artists and musicians) from performance in India shall be taxable at the rate of 20 per cent of gross receipts.” (For details log on to : http://www.business-standard.com/india/news/tax-rise-for-foreign-entertainers-sportspersons-may-affect-ipl/468214/)
CASH-RICH PSUS CAN NOW BUY STAKES IN PEERS
As part of the government’s efforts to balance demand and supply in the market on the disinvestment front, cash-rich public sector companies have been allowed to buy equities of other central public sector enterprises (CPSEs). Disinvestment Secretary Mohammad Haleem Khan told Business Standard that till now, public sector companies were only allowed to invest in mutual funds, apart from putting money in bank fixed deposits, but the Cabinet had now approved the proposal to allow these companies to buy equities of other CPSEs. “There are some companies having cash in hand that is more than their annual turnover. They have to park those funds for a while. They are putting it in bank fixed deposits. In 2007, the government decided they could also put money in mutual funds. But the capital market being what it is, at this time, investment in mutual funds has its own limitations with regard to those cash-rich companies. The other attractive option is to buy equities of some good performers, which are being sold at very interesting prices. This option is now available to them,” said Khan. (For details log on to : http://www.business-standard.com/india/news/cash-rich-psus-can-now-buy-stakes-in-peers/468234/)
OIL COMPANIES BRACE FOR TRIPLE WHAMMY OF HIGHER CESS, SERVICE TAX, EXCISE
NEW DELHI: Upstream oil and gas companies ONGC, Oil Indiaand Gail India are worried that various Budget proposals would increase their tax outgo substantially, even as they are prevented from selling crude oil at global price. These firms will have to share a larger part of the losses incurred by oil retailers IOC, HPCL and BPCL in the next financial year as the government is determined to cap the state’s share of subsidy to less than 2% of GDP. ONGC sources told FE the company would have to pay about R4,500 crore more on account of the increase in cess on crude oil production from R2,500 to R4,500 a tonne. The 2% jump in excise and service tax to 12% is expected to add a few hundred crores to ONGC’s existing outgo of R300 crore on this count. TK Ananth Kumar, director (finance), Oil Indiasaid the higher rate of cess on crude production means an extra outgo of R800 crore. Besides, the 2% increase in service tax would make oilfield services costlier, he said. (For details log on to : http://www.financialexpress.com/news/oilcos-brace-for-triple-whammy-of-higher-cess-service-tax-excise/925468/)
ESSAR, TATA, BIRLA TO TAKE HEAT OF RETROSPECTIVE AMENDMENT
NEW DELHI: The government’s decision to retrospectively amend Income Tax law to tax cross-border deals where the underlying assets lie in Indiawill impact a host of cases apart from the Vodafone’s high-profile 2007 acquisition of Hutch-Essar. The biggest setback will be for the Essar group which last year sold its 33% stake in Vodafone-Essar to the Vodafone Group. Though it paid a withholding tax on the deal to the government under protest, it sought its refund this year after the Supreme Court’s judgment absolving Vodafone of any tax payment in the Hutch acquisition case. However, now it has lost any locus standi to seek a refund. Essar’s case is also not before any court of law; so it probably becomes the biggest loser. Many other legal battles could be hit by the proposed amendment. These include Kraft’s buy of Cadbury, Tatas and Aditya Birla group acquiring the stake of AT&T’s stake in Idea Cellular, GE’s stake sale in Genpact and UK-based brewer SABMiller’s acquisition of the Indian assets of Australia’s Foster. In these cases, where tax demands are contested in courts, the companies concerned might witness a weakening of their case. (For details log on to : http://www.financialexpress.com/news/essar-tata-birla-to-take-heat-of-retrospective-amendment/925486/)
PER CENT PRICES TO GO UP 2-4 PER CENT ON HIGHER EXCISE
BANGALORE: The personal computer (PC) industry is set to hike prices in the range of 2-4% to offset the impact of an increase in excise duty as proposed in the Union Budget. The PC manufacturers who operate in an environment of very thin profit margins are unlikely to absorb the hike in excise duty and will pass it on to the customers. The Budget has proposed a 2% increase in excise duty, besides other small hikes in customs tariff rates. “Prices will increase,” Manufacturers’ Association for Information Technology (MAIT) president Alok Bharadwaj told FE, adding that the rise will take place over the next one to two months depending on the inventories of the various players. Acer Indiachief marketing officer S Rajendranconfirmed that the PC major would be looking at a price increase of all its products in the next 10 days and it could be little more than 2%. (For details log on to : http://www.financialexpress.com/news/pc-prices-to-go-up-24-on-higher-excise/925477/)
NO LACK OF FUNDS FOR NREGA, CLAIMS RAMESH
NEW DELHI: Allocation for UPA’s ambitious MNREGA scheme may have come down in the Union Budget but there would be no lack of funds for the rural job programme, rural development minister Jairam Ramesh said today. The allocation for the scheme entitling employment to poor rural households has been reduced from R40,000 crore in 2011-2012 to R33,000 crore in the Budget presented by finance minister Pranab Mukherjee for 2012-2013. However, Ramesh maintained there was no dearth of funds with an amount of R42,000 crore which includes an opening balance of R6,000 crore lying with the states and the states’ contribution of R3,000 crore available for the programme. “R6,000 is the opening balance. Pranab Mukherjee has allocated R33,000 crore. Roughly 10%—R 3,000 crore—is the state government contribution. So in 2012-2013, about R42,000 crore we can spend, which is more than adequate considering what is the performance in the state government,” he said. (For details log on to : http://www.financialexpress.com/news/no-lack-of-funds-for-nrega-claims-ramesh/925055/)
RPOWER FIRM ON TARIFF HIKE FOR ANDHRA UMPP
NEW DELHI: Reliance Power has made it clear that it will not go ahead with the implementation of its R17,500-crore Krishnapatnam ultra mega power project (UMPP) in Andhra Pradesh unless contracted buyers agree on tariff revision to accommodate the increase in fuel cost from the recent change in the Indonesian coal pricing law. Sources said that the private developer has invoked the ‘force majeure’ clause of the power purchase agreement (PPA) and served notice on power procurers seeking negotiations for tariff revision. Force majeure is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of parties prevents one or both parties from fulfilling their obligations under the contract. (For details log on to : http://www.financialexpress.com/news/rpower-firm-on-tariff-hike-for-andhra-umpp/925521/)
PROPOSED CHANGE IN TAX NORMS TO HIT AVIATION BAILOUT
NEW DELHI: The government’s move to tax all offshore deals having Indian asset with retrospective effect has put foreign investors looking at entering Indian aviation industry on guard. Aviation industry experts feel that the move could be a dampener for a few merger and acquisition deals expected in the industry, thereby adversely impacting the sector bleeding badly due to high fuel prices and taxes. “The government must review the retrospective taxation norm on sale of equity. The concept of retrospective taxation may send out wrong signals to global investors, especially when we are expecting some equity deals to happen in the aviation sector,” Amber Dubey, director (aviation), KPMG, said. In the airline space, the government has made it clear that the Cabinet is actively considering a policy to allow foreign carriers to invest up to 49% in domestic carriers. (For details log on to : http://www.financialexpress.com/news/proposed-change-in-tax-norms-to-hit-aviation-bailout/925522/)
GOVERNMENT SLAPS NEW RULE FOR FOREIGN REGISTERED AIRCRAFT IN INDIA
NEW DELHI: The government has tightened the rules for use of foreign registered aircraft in Indiaafter it noticed that companies were using loopholes in the law to avoid paying taxes in India. Under the new rules announced in the budget, a foreign registered aircraft used in Indiafor more than two months at a stretch has to be registered locally after paying appropriate taxes. The earlier time limit was six months. “No Customs duty is levied on the aircraft not registered in India, which is brought into India for purpose of ‘a’ flight to or across India, which is not intended to be registered in India and is intended to be removed from India within six months from the date of entrya¦,” the rule said. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/budget-2012-government-slaps-new-rule-for-foreign-registered-aircraft-in-india/articleshow/12322536.cms)
NUMBER OF BROADBAND CONNECTIONS CROSSES 13 MILLION
NEW DELHI: The number of broadband connections in Indiastood at 13.35 million by the end of December 2011, with Maharashtra (including Goa) accounting for the highest number at 0.23 million. “The number of broadband connections provided by the end of December 2011 are 13.35 million,” minister of communication and IT Sachin Pilot said. As per the draft National Telecom Policy 2012, the government has set a target to achieve 175 million broadband connections by 2017, and 600 million by 2020 at minimum 2 Mbps download speed. Maharashtra (including Goa) leads the race with 23.55 lakh broadband connections, followed by Tamil Nadu (including Pondicherry) with 16.62 lakh connections as on December 30, 2011, he said in a written reply to Lok Sabha. Karnataka with 13.44 lakh connections was at the third position, while Andhra Pradesh with 13.42 lakh connections took the fourth spot. Delhiwas placed at fifth position with 10.15 lakh connections. (For details log on to : http://economictimes.indiatimes.com/news/news-by-industry/telecom/number-of-broadband-connections-crosses-13-million/articleshow/12321547.cms)
TDS ON TRANSFER OF PROPERTY TO CHECK UNACCOUNTED MONEY
NEW DELHI: The Budget proposal for imposition of TDS (tax deducted at source) on transfer of immovable properties aims at cracking down on unaccounted money floating in the real estate sector. Under the proposed plan, the buyer will have to deposit 1% of the sale value as TDS. It is proposed to insert a new provision to provide that every transferee, at the time of making payments or crediting any sum by way of consideration for transfer of immovable property (other than agricultural land) shall deduct tax at the rate of 1%, according to the budget memorandum. “The TDS imposed could be a directional way to check the unaccounted money floating in the real estate sector, but the move will be a success only if the government ensures that there are enough ways and means to check the correct disclosures of property transactions made,” said Anshuman Magazine, chairman and managing director, CBRE South Asia. (For details log on to : http://www.financialexpress.com/news/tds-on-transfer-of-property-to-check-unaccounted-money/925523/)
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