· Tax policy on mergers and acquisitions and the forthcoming budget:

o At present, set off of the carry-forward losses and depreciation of the amalgamating company with the profits of the amalgamated entity is allowed. Section 72A of the Incometax Act. There is also a prescription that for a period of 5 years, the same line of business of the merged entity has to be pursued by the new entity.

o However, if a bank takes over another bank, it can avail the benefit under section 72A; but if it takes over a financial institution, this facility is not available at present.

o The forthcoming budget is expected to make amends to the tax laws to make mergers and acquisitions easier.

o The policy may be extended to more sectors like airlines, telecom, healthcare and finance.

o The mandatory period of continuing with the same line of business post-merger could be brought down from 5 years to 3 years.

· Tax exemptions may be under scrutiny by the finance ministry

o There are three broad categories under which exemptions are availed by the corporate sector. They include:

§ U/s 80G companies claim tax deduction on donations to charitable trusts and institutions.

§ U/s 80 GGB, donations to political parties are also exempt from tax.

§ U/s 80 IA, there is a tax holiday for 10 years, available to infrastructure service providers who develop, operate and maintain infrastructure facilities.

· The dabbawalahs of Mumbai

o They deliver nearly 2 lakh tiffin boxes to office goers in Mumbai everyday. They do it to six-sigma perfection.

o Six sigma actually means that the process of delivering these tiffin boxes must not produce more than 3.4 defects per million deliveries.

o These dabbawalahs follow a ‘warkari’ tradition, where a member wears a Tulsi mala and commits himself to austere lifestyle.

· Access Deficit Charge in telecom

o ADC is a levy paid by all telecom operators to state-owned BSNL to allow the latter to subsidize its rural operations and fulfill its social obligation. The players pay 1.5% of their AGR (Aggregate Gross Revenues) as ADC.

o TRAI is going to reduce this ADC for the forthcoming year. And from 2008 April onwards, this will be eliminated totally. The social obligations of BSNL will have to be then met out of the USO Fund only, where all the operators are contributing about 5% of the AGR as contribution.

o The reduction in ADC is likely to reduce the telecom tariffs.

· The EPFO dithers again on interest rate

o The Board of Trustees of the EPFO has again deferred a decision on announcing the interest rate. They are obviously scared of the Left parties’ opposition to any reduction in rate of interest. The present rate of interest is 8.5%. If it reduces it to 8%, it will be left with a surplus of about Rs. 10 crore; if it keeps the rate at 8.5%, it will have to seek a subsidy of Rs. 450 crore from government.

· UCC (Unsolicited Commercial Calls) and DNCR (Do Not Call Registry)

o Recently, the Delhi State Consumer Disputes Redressal Commission had imposed a total fine of Rs. 75 lakhs on Airtel, the COAI (Cellular Operators Association of India), ICICI Bank and American Express Bank for UCC made to a person.

o Our Constitution provides protection of citizens’ privacy rights. This is implied under the fundamental rights guaranteed under Articles 19 and 21 of the Constitution.

o Section 427 of the Indian Telegraph Rules, 1951 provides that telephone should not be used to disturb or irritate any persons or to transmit any message for communication which may annoy a person.

o TRAI has come up with a consultation paper on UCC in November, 2006.

o Countries such as US, UK and Australia have introduced adequate legislative measures to prevent UCC and also set up DNCRs.

o India also should adopt serious measures to prevent UCC. A specific law dealing with UCC, with adequate enforcement mechanism, exemplary damages and fines, provisions for termination of business licences in case of violation, and penalties for trading consumers’ personal information should be introduced.