What is it? It's a unique online payment solution that offers
you complete security while shopping on the internet. These "Sharp
Cards" can be created online for any value up to your credit
limit. They have a life of only 24 hours and any unspent balance
is automatically credited back to your account.
How does it work? You create a virtual card by using
your existing credit or debit card number. You can then use this
virtual card number only once at any online merchant site and
complete your shopping with security and ease.
Who's offering it? HDFC Bank (Netsafe) and ICICI Bank
(Internet Only Card).
How much does it cost? It's free!
Any downsides? None that anyone has discovered as yet.
-Deepti Khanna Bose
Imported Booze May Cost
Less
What is it? In 2001, the government had imposed duties
of 25-150 per cent on imported wines and spirits. These are now
likely to be cut.
Why? The government, which levied these taxes ostensibly
to protect domestic producers, has been under massive pressure
from the European Union to cut duties. However, it is unlikely
that the EU will be satisfied with the removal of additional duties;
it will continue to demand the reduction of basic excise duties
of between 100 and 150 per cent.
The impact? Though imported alcohol will continue to
be expensive, the cut will lead to a significant reduction in
prices. Prices of premium imported Scotch whisky, vodkas and tequilas,
that cost upwards of Rs 1,500, will fall by a couple of hundred
bucks.
When? Well, if all goes to plan, this should be announced
in the forthcoming Budget.
-Kushan Mitra
ECONOMY WATCH
GOLD PRICES
Status: Gold prices have jumped over 5 per cent in the
last month to Rs 9,290.70 per 10 gm on the NCDEX spot market.
Impact: Apart from demand-supply mismatch, gold prices
are scaling high in the international market on fund buying because
the dollar has weakened against other European currency. Buyers
there are buying gold as a hedge against inflation.
BOND YIELDS
Status: At 127, up from 122 in March 2006.
Impact: The rising index will help attract capital from
foreign institutional investors, NRIs and also encourage domestic
entrepreneurs to carry on with their expansion plans.
-Compiled by Mahesh Nayak and Anand
Adhikari
P-WATCH
A bird's eye view of what's hot and what's
not on the government's policy radar.
GOVT FIRMING UP FII TAX RULES
| THE CONUNDRUM |
| »
Tax treatment of FIIs investments is the key issue
» If
treated as investors, they pay 10% tax (if shares are sold
within a year's time); else, as traders, they pay 33.7%
on profits
|
Foreign Institutional Investors (FIIs) dislike changing government
regulations as much as they like market movements. And, the former
seems to be brewing for a while. Confusion over the tax treatment
of equity investment in India by FIIs deepened in the last few weeks
following a ruling passed by the Authority for Advance Ruling (AAR)
on the us and Canada-based Fidelity Group.
The ruling states that the income from sale of Indian equities
by Fidelity's 38-odd offshore funds will be treated as 'capital
gains' and, hence, will attract a 10 per cent tax. However, an
earlier ruling by the same quasi-judicial body had categorised
income from trading in shares as business income, which attracts
higher taxes.
That said, most FIIs end up paying no tax in India on equity
sales as they use the option provided by the double tax avoidance
treaties that India has with countries such as Mauritius.
The policymakers in the Finance Ministry believe that FIIs can
be both traders and investors. Hence, a new set of regulations
are in the offing, which have larger ramifications for the investing
community. Watch this space.
-Shalini S. Dagar
ROAM WITHOUT HURTING YOUR POCKET
Regulations are often non-symbiotic-some win, while others lose.
in a "consumer friendly" decision that has irked telecom
operators, the Telecom Regulatory Authority of India (TRAI) has
slashed roaming tariffs for all pre-paid and post-paid customers
between 22 and 56 per cent. Customers will now not only receive
free SMSs while on the go, but will also be exempt from charges
that involve transactions between operators.
Telecom companies are crying hoarse over TRAI's directive, which,
they claim, will see the industry's revenues drop by Rs 800-900
crore. Surely, the regulator cannot be charged with populism.
-Aman Malik
FARM SECURITY NOT NEGOTIABLE: KAMAL NATH
With time ripening for another set of technical talks on the
Doha rounds (the impasse over the WTO talks is likely to end),
India has made it clear that fresh talks could not perpetuate
flaws in global trade and subsidy in agriculture any further.
According to Commerce Minister Kamal Nath: "The continuation
of talks is important but more important is what we talk about."
The process of give and take, however, has its limitations. Says
Nath: "We are flexible as long as it does not impinge on
the livelihood security of Indian subsistence farmers." One
wishes various state governments were as concerned about the livelihood
of farmers as Kamal Nath.
-Amit Mukherjee
FM KICKS INSURERS
Having conceded over 35 per cent market share to private sector
insurers over the last six years, public sector insurers are under
fire from their owner, the government. Recently, Finance Minister
P. Chidambaram cracked the whip on the public sector insurance
majors, asking them to prepare a strategy to improve operations.
And, he has reason to complain. More claims are pending than those
settled. Surely, the FM's request cannot be treated as just another
claim.
-Balaji Chandramouli
 |
| Pills: Pricing is the key |
PHARMA POLICY MOVE
With private sector pharma majors protesting against essential
drugs being brought under the price control regime, the government
has appointed a seven-member committee headed by Agriculture Minister
Sharad Pawar to examine the issue. Even though this move affects
only 12 per cent of the market, it reeks of the populism pill.
-Balaji Chandramouli
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