Airlines join hands; fares likely to move north
10 domestic airline companies have come together to form Federation of Indian Airlines (FIA) to represent the airlines’ interest.
According to Competition Act, a cartel would attract a penalty of 10% of the turnover of the cartel or three times the profits out of that cartel, whichever is higher.
Direct tax kitty swells by 40%
Direct tax collections are soaring over 40% to cross Rs. 90,000 cr.
Two positive trends noticed:
- A rise in the tax/GDP ratio and
- A rise in the share of direct taxes in the overall tax kitty to well above 50%.
Gifting industry is pegged at an estimated Rs. 150 cr in India and is growing at 20% per annum.
The total oral care market in India is estimated to be Rs. 5,000 cr.
Fall in outsourcing deals marks shift in market dynamics
The volume of outsourcing in 2005 stood at $81.9 bn in contracts while it was $84.7 bn in 2004.
A further slowdown to $55.3 bn is expected in the current year.
Government may club three ways to buy RBI’s stake in SBI
At present the SBI Act, 1955 mandates that RBI’s stake should not fall below 55%.
Taking over the stake of the RBI in the bank would entail an investment of Rs. 29,000 cr. As this would leave a huge effect on the fisc, the government is toying with innovative ideas in this regard.
- Some fiscal space to provide for part of the bill
- Partly from borrowing and
- Partly by dipping into the ways and means advances from the RBI.
Government to protect trademark of global Indian companies
India is planning to become part of the Madrid protocol (Madrid International Protocol – MIP)
Protocol has a 78 country membership. Signing it means protection of trademark in those countries. Violation can be challenged in WIPO (World Intellectual Property Organization)
Cashew exports from the country stood at 58,210 tonnes valued at Rs. 1222.93 cr. in the first six months of the current fiscal year.
IRDA for cap on LIC equity exposure
With 19 cr policyholders, LIC needs to limit its risk profile feels the IRDA.
The total sum assured plus bonus etc., would be around Rs. 4.7 lk crores as on March 31, 2006.
The prudential guidelines framed by the IRDA stipulate a maximum of 10% investment cap in any company’s equity.
Banking sector reform
The present FDI policy allows for 74% foreign investment (including FDI, FII and other foreign sources) but with a cap on voting rights at 10%. That is, even if a foreign shareholder has more than 10% stake in a private sector bank, his voting rights are restricted to 10% only.
The governments proposal now is to allow this restriction to be increased to 26%.
The President’s mercy power
It is exercised under Article 72 of the constitution. Although the President is expected to act on the advice of the Union Cabinet, the power is believed to be plenary in nature. What this means is that the President has full and complete discretion in arriving at a decision in the matter.
That is he need not be bound by the advice rendered by the Council of Ministers.
The Finance Minister’s prescription:
We need more reforms for growth. There are three areas where we need to raise the bar :
- Agriculture: India Inc cannot be preoccupied with manufacturing and services and needs to enter in a big way in agriculture – without disturbing the sacred relationship between the tiller and the land.
- Energy sector reforms: We need new and innovative ways to raise crude production, to raise coal production and to solve problems of pricing and distribution of electricity.
- Financial sector reforms