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Who: Srinath
Batni, Executive Director, Infosys
Why: He sold 10,000 shares of Infosys
on August 14 for Rs 1.74 crore
The catch: He had informed the company
of his intent to sell, but failed to tell it about the actual
sale within the stipulated period of one working day (he finally
told it 10 days later). This was in violation of Infosys' 'insider-trading'
rules
The solution: A gentle slap on the
wrist really; Infosys has fined Batni Rs 5 lakh (he is to donate
this sum to a charity)
The context: Batni has thus far sold 25,000 shares of
Infosys this year; he still holds around 5.31 lakh shares in the
company
Opinion: Batni could not be reached for comment, either
on the issue, or on the identity of the charity to which he plans
to give the money
-Venkatesha Babu
The Price Of TV
What: Rs 5
Why: The Telecom Regulatory Authority of India has said
Rs 5 is the maximum charge that can be levied by television channels
(from subscribers) in areas where the Conditional Access Service
is operational
Where: That would include parts of Delhi, Mumbai, Kolkata,
and Chennai
When: December 31, 2006
The context: Channels have been asking that a higher
tariff be fixed (and will likely lobby for it now); TRAI also
refused to review the Rs 77-price on free-to-air channels in the
same areas
Last word: There hasn't been one yet; meanwhile, Tata
Sky and Zee are locked in an ongoing battle, and the DTH era has
finally well and truly arrived in India
ECONOMY WATCH
INFLATION
Status: 4.91 per cent for the week ended August 19, 2006;
overall, shows a mixed trend with an upward bias. However, this
WPI-based figure does not always capture actual price increases.
Impact: Lending rates to increase; Short-term deposits
to go up; Corporate interest cost burden will rise further.
NPAS
Status: Down 23.76 per cent to Rs 44,446 crore in March
2005-06 compared to 2004-05 figures.
Impact: Better asset quality and utilisation;
Healthier banking system; improvement in productivity;
Stakeholders, including shareholders, to benefit.
-Compiled by Anand Adhikari
P-WATCH
A bird's eye view of what's hot and what's
not on the government's policy radar.
NEW AVENUES FOR REVENUE
| LOOKING FOR TRAILS |
»
Mandatory for tax payers to quote PAN number in
transactions
» Audit
trail to reveal income profile of tax payers
» Tax
authorities will look for mismatch in income and tax payout
» The
audit trail will also net those who don't pay taxes on gains
in market trades |
The tax dragnet just got tougher to evade. The income tax department
plans to insist on the tax payer quoting the Permanent Account
Number (pan) number in all securities transactions. This way,
the government hopes to obtain an audit trail on the scale of
operation of the tax payer, and in turn, estimate his income.
If the income tax paid is not commensurate with this income, the
tax authorities have reason to knock on the errant tax payer's
doors. Further, this measure will also reveal the extent of income
derived from trading operations and whether or not tax on this
income was paid.
Currently, the securities transactions tax returns are filed
by stock exchanges and mutual funds only to help verify the authenticity
of the trades carried out by the brokers. Clearly, the government
is not satisfied with the swelling tax kitty. Besides the objective
of netting defaulters, there is an immediacy to the issue-government
expenditure is rising.
-Shalini S. Dagar
NO LAISSEZ FAIRE?
The union steel ministry is pushing for curbs on export of high
grade iron ore. Steel Minister Paswan has recently written to
Commerce Minister Kamal Nath that such a move-banning exports
in a phased manner over the next five years-is in line with the
draft National Steel Policy 2004, which targets an annual production
of 100 million tonnes by 2020. Currently, the figure stands at
around 38 million tonnes. Paswan bases his argument on fears that
exports of high grade ore (with over 65 per cent iron content)
at the prevailing pace would exhaust reserves in the next 25 years.
While this is music to the ears of international steel giants
like Posco and Arcelor Mittal, who plan to set up shop in the
country, the mining industry is surely not amused.
-Aman Malik
NORMS MAY EASE FOR FOREIGN MANAGERS
The phobia against foreign nationality managers managing domestic
telecom companies appears to be abating. The Department of Telecom
(dot) is reviewing the foreign direct investment (FDI) guidelines
to enable companies having less 49 per cent FDI holding to hire
foreign top management. If agreed upon by the Cabinet, it will
spell a major relief to companies like Tata Teleservices and Reliance
Infocomm, where foreign investment is way below the 49 per cent
limit. Interestingly, the ban was absent till November 2005, when
the government decided to raise the FDI limit in Indian telecom
companies from 49 to 74 per cent. Alongside, came the ban on hiring
foreign top management.
-Shaleen Agrawal
JOINT AUDIT FOR MNCS
As India integrates with the Asean economies, the government
is proposing a joint audit for multinationals operating in the
region. Along with trade and tax treaties (with these countries),
the audit will help monitor India's cross-border transactions
according to the advisor to Finance Minister Parthasarthi Shome.
China, Shome says, has similar mechanisms in place: joint audits
with `friendly countries'. The cross-border tax administration
policy will likely be based on the Singapore model.
-Balaji Chandramouli
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| Smoother ride: In future |
BETTER DEFENCE DEALS
This is one business marred by a fair degree of opacity-defence
procurement. The government has now come up with a revised defence
procurement policy to cut delays and reduce corruption.
The pie has always been big-India plans to procure Rs 1,00,000-crore
worth of defence equipment over the next five years. This move
could make the business attractive to a larger section of industry
and ensure competitiveness.
-Shalini S. Dagar
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