Andhranews

Mumbai, Aug. 30: The Reserve Bank of India (RBI) said that the growth momentum, led by the industry and services sector, would continue during 2006-07 as the evolving economic and business environment exhibits a number of encouraging signs that suggest reinforcement of the robust economic growth exhibited in recent years.

Growth prospects are, however, subject to a number of downside risks, the apex bank said in it annual report for 2005-06 released on Wednesday. The risks, it said, emanated from the global economy and include potential escalation and volatility in international crude oil prices, a disorderly unwinding of the macroeconomic imbalances of the major economies, firming up of overall inflationary pressures and expectations, and a hardening of international interest rates along with the withdrawal of monetary accommodation.

The risk factors from domestic conditions relate to the progress of the monsoon, infrastructural bottlenecks, emerging apprehensions regarding the fiscal outlook and possible hardening of inflation expectations. It said that inflation was contained by pre-emptive monetary measures which, in turn, provided conducive conditions for the undisrupted expansion of economic activity while maintaining macroeconomic and financial stability.

It, however, said that financial stability and the maintenance of the current growth momentum will depend, inter alia, on policy improvements in agriculture, improved quantity and quality of physical infrastructure and progress in fiscal consolidation. It emphasised that for the Indian economy to maintain its growth momentum on a sustained basis, the agriculture sector would have to play a more important role than it has in recent years.The bank expressed concern that the actual growth in the agricultural sector during the first four years of the Tenth Plan has averaged two per cent per annum.

Hyderabad, Aug. 28: Microsoft Corp., the world’s largest software maker, on Friday said State governments should enforce laws governing Intellectual Property to curb software piracy. While the laws on IP are made by the Centre, their enforcement is the res-ponsibility of State governments.

Speaking at the inauguration of a new block at the Microsoft India Development Centre (MSIDC) here, Srini Koppulu, managing director of MSIDC, requested Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy to ensure that the IP laws were enforced to prevent piracy. Dr Reddy assured Microsoft of support.

Mr Koppulu said MSIDC, which was started in 1998, now had 1,200 employees. MSIDC is the largest software development centre of Microsoft outside its headquarters in Redmond in the United States. Mr Koppulu, a 17-year veteran of Microsoft, said the company planned to hire about 500 engineers every year for the centre. The development centre has been involved in designing Windows Vista, the operating systems which Microsoft expects to launch early next year.

He said that apart from the software product development, the Hyderabad campus was the headquarters for Microsoft’s Global Services Centre and the Global Delivery Centre. The GDC has over 600 employees, according to Moorthy K. Uppaluri, general manager of the GDC. The GSC currently has over 200 employees, Arumugam Saravanan, managing director, said.

Mr Koppulu said the Microsoft campus here served as the headquarters of six of the company’s businesses. The company expects to increase its headcount in India from 4,000 now to 7,000 by the year 2009.

Mumbai, Aug. 30: A few of the big corporate houses, who are lackadaisical in implementing the provisions of Clause 49, will be identified and made an example of, said Mr M. Damodaran, chairman, Securities and Exchange Board of India. Addressing a workshop organised on Wednesday by the CII on “Corporate India Taking Clause 49 Forward”, Mr Damodaran reiterated that clearly before the year is out, “We will persuade the stock exchanges to identify those companies who can comply with Clause 49, but are not doing so.” When this is done, there will be pressure from international companies and others on such companies, he said.

He was sceptical about one report that said 85 per cent of the companies have implemented Clause 49. He said, tongue-in-cheek, “It is more likely to be 8.5 per cent.” Mr Damodaran urged those people, who have made a cottage industry of showing companies how to implement Clause 49, to “look at the price tag of the solutions provided. You should realise that you stand to gain from an economy which knows how to deal with risks.”

He said in national interest and also in their own interest, they should look on good governance “not as a huge earning proposition but revisit the cost to companies to enable them to go forward. Companies also should not look at it only as costs, but also as an investment.” He asked the CII to address the issue of putting in place and identifying age-ncies. He suggested that they should look closely at the draft company bill to see whether concerns of what is needed for corporate governance finds a presence in this statute.

Paradip (Orissa), Aug. 30: Inching further closer towards the people who are agitating against its 12-million-tonne steel plant, Posco-India, the Indian subsidiary of South Korea’s Pohang Steel Company (Posco), on Wednesday opened a new office at Kujanga near here.

This new office, said to be comple-tely dedicated to rehabilitation and resettlement (R&R) for locals, aims to address issues and concerns of people through regular interactions.
A section of local people here have been resiting the proposed Rs 51,000-crore Posco steel plant project on the ground of their displacement.

The State government had failed to convince to the locals about the benefits of the project. Speaking on the inaugural ceremony, Posco-India chief Soung Sik Cho said, “Our goal is to design an adequate and fair R&R package and to adopt a suitable corporate social responsibility (CSR) programme, thereby extending direct and indirect benefits to the local people.”

I am a businessman suffering from a serious ailment. My business income has now stopped since the partners have now started their own business. My income from all the sources put together is around Rs 2.4 lakhs per annum, which is just sufficient to take care of my medical expenses. Kindly advice me the best way to save taxes?

B.S. Saxena, Mumbai

In the absence of specific details about your ailment, a definite advice to your problem may be little difficult to make. However, in case your ailment is one of the ailments prescribed U/s. 80DDB, you can claim a deduction upto Rs 40,000 provided you are able to satisfy the conditions laid down under this section. Further, in case you happen to be a senior citizen, there shall be no liability to tax upto an income of Rs 1,85,000.

Salaries assessees are not allowed to claim expenditure and on the other hand, the business people claim unlimited benefit on their expenditure?

M. Ramaswamy, Chennai

Business income is arrived at after incurring various expenditures like salaries, rent, conveyance, interest etc. In the process, it is quite likely that certain advantage is taken by businessmen and professionals by jacking up expenses or treating certain personal expenses as business expenditure, which is not possible in the case of salaries assessees. This grievance of the salaried assessees is further compounded by the withdrawal of the standard deduction of Rs 30,000 from financial year 2005-06 onwards.

Can I avail tax concession on housing loan for purchasing a plot? Also, will get tax benefits if I take two loans?

Ravinder Chary, Warangal

The benefit of deductions U/s. 24 and U/s. 80C shall be available only if construction, on the plot acquired with the help of loan, is completed within three years from the date of obtaining the loan, and subject to satisfying the condition that construction on plot so acquired is completed within three years from obtaining the loan. There is no restriction on availing the loan as well as the deduction to be claimed.

Kamal Rathi represents Rathi & Malani, a Hyderabad-based chartered accountancy firm. The views expressed here are those of the author. They do not reflect the views of this newspaper.

Readers can send their personal income-tax queries to Mr Rathi at kamalrathi.ca@gmail.com, or write him at Tax Matters, C/o Deccan Chronicle, 36, Sarojini Devi Road, Secunderabad-500003, AP

Advancements in the nanotechnology industry pro-mise to offer improvements in capabilities across a spectrum of applications, according to Technical Insights Research, a part of Frost & Sullivan, a consulting firm. This is of immense strategic importance to the defence and security sector, which has historically leveraged technological advances.
“While nanotechnology offers solutions to a wide-ranging array of individual problems, matching application-level problems with nanotechnology solutions is going to be a significant challenge for nanotech developers,” TIR says. “Nanotechnology is often seen as a set of solutions rather than a monolithic product or technology group.”

It says the key to success for nanotechnology firms is to develop optimal solutions that not only offer advantages in terms of improved performance or lower cost, but also cater to a specific and clearly defined application. Although its knowledge base stems from general, broad-stream technology development in a number of different areas, firms should implement nanotechnology on a case-by-case basis.

Forming a strong partnership between nanotechnology and defence firms will help synchronise nanotechnology development with application-level requirements. Such a strategy allows a nanotech firm to combine its core domain knowledge and capability with defense contractors’ applications level experience, the research firm says. “By focusing on clear application-level problems that are relevant to their customers, nanotech firms give themselves a safe, solid first step, and an ideal launch pad,” it says. “It also allows them to prove their technology and to generate revenues to support ongoing development.”

“Small nanotechnology start-ups offering high-tech solutions face funding challenges, especially when they clear the government-funded phases of technology development and are planning to commercialise the technology,” Technical Insights says. “Such problems only emphasise the importance of cooperation and collaboration in the field of nanotechnology.”

Mobile TV encoding

As millions of users watch video on their mobile devices, operators are facing the growing challenge of having to deploy as many video headends as there are networks and device types. In anticipation of a converged IP world made up of hybrid networks and hybrid devices, Envivio Inc. has introduced the first encoder able to support any device on any network. According to Envivio, its multi-rate, multi-resolution and multi-standard encoder outputs eight simultaneous profiles with live bit rate.

Hyderabad, Aug. 30: Financing options are the newest front in the vendor war for a greater share of the IT budget, according to Forrester Research, Inc., an independent technolology and market research firm.“Research confirms that more and more enterprises of all sizes continue to evaluate software-as-a-service (SaaS) to defer capital outlays and infrastructure costs. In response, many on-premise software companies are using financing to make the purchasing options appear more attractive,” the research by R. “Ray” Wang, Merv Adrian and Emily Van Metre says.

The report says these vendors are not only offering a variety of flexible payment programmes through direct and partner channels but are also offering to consolidate IT spending through programme extensions that include the bundling of professional services and training. Forrester says that constrained growth in IT budgets is driving enterprises to defer capital outlays.

“With service-oriented arc-hitecture (SOA) projects on the horizon, enterprise resource planning (ERP) upgrades looming, and middleware ecosystem standardisation projects being planned, IT budgets for the next five years appear to be increasingly constrained,” it says. Despite continued grow-th in investments, recent Forrester research says overall software spending growth has slowed down from 10 per cent in 2005 to seven per cent in 2006. Hence, enterprises are seeking capital deferment as one approach to pay for future investments.

“Rising interest rates are compelling enterprises to ‘lock in’ on financing. With 17 consecutive interest rate hikes by the US Federal Reserve, recent Bank of Japan rate increases, and planned increases by other Central banks, the era of ‘cheap’ capital appears to be ending. Where possible, enterprises continue to lock in financing terms at historically low rates for all types of investments, including software. Vendors with the financial muscle to provide attractive financing terms see opportunity here,” it says.

According to Forrester, SaaS options are driving familiarity of alternative payment, pricing, and licensing options. While actual adoption of SaaS remains much lower than on-premise deployment, interest continues to show growth. According to a November 2005 Forrester Business Technographics survey, more than 20 per cent of 583 software and services decision-makers in North America and Europe across all sizes of enterprises have considered or deployed this option. “This interest will drive enterprises to ask vendors for new pricing models and payment options,” the report says.

Mumbai, Aug. 30: Essel Propack Limited on Wednesday announced that the company is acquiring 100 per cent stake in Packaging India Private Limited (PIPL), a proven player in the manufacturing of speciality packaging materials, and a part of FMCG major Cavinkare Group, Chennai, for Rs 87.5 crores in an all-cash deal.

The equity component is Rs 63.5 crores with the balance being debt. This acquisition marks Essel Propack’s entry into the speciality packaging segment which is a Rs 2,500-crore category and growing at over 15 per cent per annum. The overall packaging market in India is estimated at Rs 11,000 crores.

“This is a significant step in our product diversification strategy. With the pharma and retail market poised for tremendous growth, the demand for speciality packaging materials is slated to rise. This is the opportune time for us to step in and leverage the opportunities,” said Mr Ashok Goel, vice-chairman and managing director, Essel Propack Limited.

The company aims at high-end lamination technology for speciality materials, with the OEM (original equipment manufacturer) business model. Moreover, with high standards of quality and manufacturing systems, it aims to expand the product portfolio to enable better service to customers. According to Mr Goel, creativity and innovation is poised to take the centre stage in the field of packaging.

The market demands are poised towards new trends and sophistication and user-friendliness. These needs can only be met by superior manufacturing environment, high profile features and finer processes. The company and PIPL are focused on creating such a discipline in the manufacture of speciality packaging materials.

PIPL today is the third-largest producer of speciality packaging materials in India offering innovative packaging solutions. It enjoys a leading market position in the southern part of the country with substantial breadth, state-of-the-art technology, unmatched product development expertise, and strong relationship with a highly diversified, blue chip customer base.

Mumbai, Aug. 30: The FLAG Telecom Group Limited, an associate company of Reliance Communications Limited, has approached the International Court of Arbitration of International Chamber of Commerce or ICC to determine the reasonable and cost-based access charges at VSNL’s Mumbai landing station.

RCL informed the Bombay and National Stock Exchanges about this development and said that negotiations between Flag and VSNL failed “due to monopolistic and anti-competitive attitude of VSNL.” Flag had earlier gone to the ICC against VSNL on two counts, one for being permitted to upgrade its cables and the other on access charges.

The ICC, had in its award, said VSNL should permit Flag to upgrade its cables and ordered both parties to mutually discuss and arrive at an amicable settlement on access charges. The talks over 90 days failed on the latter count, so Flag has gone back to the ICC. It has also approached the tribunal “for setting a time table for determination of damages due to the unlawful refusal of VSNL to grant access to FLAG from 1998 onwards.”

A VSNL spokesman when asked to comment said, “VSNL is fully compliant with the Arbitral Award. VSNL believes that its commercial proposals related to access charges are fair and reasonable.” RCL claimed that the failure of negotiations would harm the ITeS/BPO and other user industries in India due to the exorbitantly high bandwidth prices and landing station access charges maintained by VSNL, which lead to unrealistically high costs of international connectivity for Indian Enterprises. This would result in higher costs for the end consumers in India, it said.

A new online music company called SpiralFrog said on Tuesday that it would make songs from Universal Music Group available for free downloading if users agreed to watch advertising, the latest in a series of efforts to wean young fans off pirated music and to challenge Apple Computer’s iTunes.

SpiralFrog, a privately-held company headed by Mr Robin Kent, a former advertising executive, said that Universal had agreed to license its entire North American music catalogue, which includes artists like Eminem, Sheryl Crow and Sting, for download, with a test of the service expected to start in the United States and Canada by the end of the year. A spokesman for SpiralFrog said the offering would be extended to Britain and other European markets next year.

Universal Music declined to comment, beyond confirming the agreement. While the music industry for years resisted the idea of “free” music, associating it with rampant online piracy, now it is eager to experiment with new digital business models. The growth of online advertising has encouraged industry executives that advertiser-supported music services could win consumer acceptance, while still compensating record companies and artists.

Some record company executives also chafe at the dominance of iTunes, particularly its insistence on a one-size- fits-all pricing model, saying that it has restricted the growth of digital sales.SpiralFrog is not the first legitimate service to make music available free to consumers.

Napster, a former scourge of the record companies that was later reborn as a legitimate digital business, this year introduced a limited advertiser-supported service that lets users listen to some songs without paying. Kazaa, a digital file-sharing network that agreed last month to settle copyright infringement lawsuits with the music and movie industries, is also expected to introduce an advertiser-supported offering.

Kuala Lumpur, Aug. 30: Noting that the biotechnology industry in Asia is still at a nascent stage, India has announced the launch of an annual ‘Asia Biotech’ meet, bringing together scientists and biotechnology experts who will focus mostly on the needs of the people of the region.

“Most of Asia is largely an agricultural community so agricultural biotechnology is necessary for food security,” minister for science and technology Kapil Sibal said adding that the experts would also focus on health security. The launching of the annual meeting was announced by Sibal at the fourth Asean informal ministerial meeting on Science and Technology, held at Kuatan in Pahang State.The annual meet is modelled on the lines of the ‘Biotechnology Conference’ held annually in the United States.