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Rajya Sabha passes Women's Reservation Bill

Wed, 10 Mar 2010 00:00:00 GMT

New Delhi: After a day of high drama that saw the Rajya Sabha swarm with more than a hundred marshals in blue dresses called in to bundle out seven MPs blocking proceedings, the House recorded a historic vote in favour of a bill providing for 33% reservation for women in Parliament and assemblies.

The legislation is likely to be brought to the Lok Sabha after the vote-on-account has been passed, with the Congress leadership showing that it was not deterred by the bigger strength of the quota opponents in the lower House. It has to be brought to the LS as a logical corollary, said Sonia Gan-dhi although she refused to get into the specifics of the likely time-table.

The vote had been vehemently stalled by anti-women's quota protesters in the RS throughout Monday while the government calculated the political fallout of all-out hostilities with SP and RJD leaders Mulayam Singh and Lalu Prasad. While the government dithered, a handful of dissenters held the House to ransom.

On Tuesday morning, the mood was different. Armed with Sonia's directions, the government was ready to seek suspension of the dissenting MPs. After a four-hour debate in the afternoon, the House scored a thumping 186 votes with just one MP, Sharad Joshi of the Swatantra Paksh Party, voting against the bill.

Before the discussion which saw MPs rising to the occasion with only a few partisan jabs, the government prepared for the day on a war footing after having cut an indecisive figure on Monday.

The mood was set at the Congress core group's meeting after the RS concluded its disrupted proceedings where Sonia made it clear that the women's bill could not be abandoned. Government managers had been restrained against the protesters due to concern over the political fallout of snapping ties with SP and RJD chiefs Mulayam Singh and Lalu Prasad and the resultant reduction in the buffer of 320-plus MPs that UPA enjoyed in Lok Sabha.

SP would have to take on Congress for Muslim vote

This would be sharply whittled while the say of allies -- whom Congress had managed well so far -- would increase.

But the Congress leadership kept in mind what it saw was an inevitable drift of SP and RJD away from Congress, given their competing political interests. SP would have to take on Congress for the Muslim vote in UP and in Bihar Sonia's party was determined to carve an identity quite separate from Lalu. If floor management became difficult after the women's bill, it was inevitable.

The Congress core group took stock at PM Manmohan Singh's office around 1 pm after the government managers already set their strategy in motion. Once again, Sonia's view that the party and government could not back off was clear.

Indeed, doing so would have severely hurt the government's esteem and raised the morale of the anti-quota brigade sky high. It would have laid the government open to a savaging from BJP and Left. After getting the bill through Rajya Sabha, government sources are careful of when it will be moved to Lok Sabha where an even sterner test awaits it. The government had to deal with just about 8-10 dissenters in Rajya Sabha but in Lok Sabha, Mulayam and Lalu can be expected to lead the opposition. Though the bill's passage is a blow to the two Yadav leaders, the possibility of having to marshal out 30-40 MPs is not easy to contemplate.

In keeping with its priorities, the government is moving a discussion on the general budget in Lok Sabha on Wednesday itself.

(10-Mar-10)

The Times of India

Rupee falls by 12 paise against dollar in early trade

Wed, 10 Mar 2010 00:00:00 GMT

Mumbai: The Indian rupee depreciated by 12 paise against the US dollar in early trade on Wednesday, following the American currency's gains overseas.

At the Interbank Foreign Exchange (Forex) market, the rupee fell by 12 paise to 45.50 a dollar. The rupee closed lower by 10 paise at 45.62/63 a dollar in the previous session.

Forex dealers said besides strong dollar overseas, demand from importers for the US currency also weighed on the rupee sentiment.

Meanwhile, the Bombay Stock Exchange index Sensex rose by 43.39 points, or 0.25 per cent at 17,095.93 points in opening trade today.

(10-Mar-10)

The Times of India

Companies set to hire 10 lakh in '10-11

Wed, 10 Mar 2010 00:00:00 GMT

Chennai: It's official. Jobs are back. The organised sector in India is set to create close to a million new jobs in 2010-2011, according to a Ma Foi Employment Trends Survey. However, hiring intentions of employers are not really loud and clear in the immediate future. Most of them are cautious for the next four months but optimistic about the new financial year.

The focus is on smaller cities like Ahmedabad and Pune. Among the metros, Chennai is leading, followed by Bangalore and Kolkata. Mumbai and Delhi are yet to recover fully from the impact of the slowdown.

The survey was conducted earlier this year among 1,000 companies across 11 industry segments in India -- banking, financial services and insurance (BFSI), education, energy, health, hospitality & travel, IT, ITeS, real estate & construction, trade, transport and manufacturing. The survey asked these companies on their hiring plans over the next three months and over the next year.

"There seems to be a cautious approach by employers. They want to see if the recovery trends are sustainable since most of their revenue models are based on western economy and in the US and across Europe there are still conflicting signals. So while medium to long term plans look robust, no one wants to get caught on wrong foot," said E Balaji, CEO of Ma Foi Management Consultants.

Balaji is bullish about the employment growth in pharma, healthcare and manufacturing sector (which is expected to generate 68,000 jobs). "In the BFSI sector, where we expect 46,000 new jobs, bulk of them will be generated by PSU banks," he said.

"In the ITBPO sector, growth will be muted in the near term. Consequently, retail too is likely to lie low for sometime, since those in the ITBPO sector are their biggest spenders and this time around, these lot of people are likely to be more cautious about their spending habits." However, the IT industry is likely to generate 97,000 jobs. Incidentally, only a couple of days ago, Infosys said the IT industry will create 3 lakh jobs over the next 12 months.

Healthcare is on top of the list expecting to generate 2,95,000 jobs, followed by the hospitality sector (1,37,000). Real estate follows closely with 1,36,000 new jobs.

(10-Mar-10)

The Times of India

Long-term capital gains may make it to DTC regime

Wed, 10 Mar 2010 00:00:00 GMT

New Delhi: The government is likely to maintain the distinction between short term and long-term capital gains to encourage long-term savings, as it deliberates the draft direct taxes code.

The finance minister said in his Budget speech that the new direct taxes law could be rolled out from April 1, 2011. The government is veering around to the view that the existing regime with regard to taxation of capital gains should be continued, a finance ministry official privy to discussions told ET.

Long-term capital gains are taxed at concessional rates while short-term gains are taxed at the marginal rate of the tax payer and could be as high 30% for those in the highest slab. The tax treatment of shares is different from other assets. Currently, any stock market asset held for more 12 months is considered long-term capital assets but for all other assets have to be held for more than 36 months to be considered a long-term asset.

Moreover, shares held for the long-term attract only the securities transactions tax while others assets are levied a long-term capital gains tax of 10%.

The draft direct taxes code has proposed to tax capital assets irrespective of the period of holding. The entire capital gains of the assessee is proposed to be added to his income and taxed at the marginal rate.

The Central Board of Direct Taxes, the apex direct taxes body, that examined the code threadbare has also favoured continuing with the current framework with regard to capital gains tax.

Finance Minister Pranab Mukherjee has asked the CBDT to rework the draft code based on the feedback received from stakeholders before it is introduced in the Monsoon session.

"There is surely an advantage to have different tax rates for long-term and or short, but that may not be the sole factor for an investor while undertaking a commercial transaction. Different factors including market conditions, requirement of funds, future expected realisations may have an over-arching impact on financial decision," said Vikas Vasal, executive director, KPMG.

However, in case of stock market transactions, concessional rate of tax has been in place for some time now and long-term gains could be completely tax free except for small amount on STT.

Even industry chambers have advocated continuing the existing regime for taxation of capital gains.

"We will introduce the legislation sometime in the monsoon session. We have had discussions with all stakeholders and based on it I want to prepare a draft and place it for public comments once again before I introduce it," Mr Mukherjee had told ET earlier.

(10-Mar-10)

The Economic Times

Bank of Rajasthan shares crash 7%

Wed, 10 Mar 2010 00:00:00 GMT

Mumbai: Shares of Bank of Rajasthan fell 7% in heavy trade on Tuesday after a SEBI order late on Monday evening barred the major shareholders of the private bank and a few group companies from dealing in the stock market till further notice.

The Tayals -- one of the biggest shareholders of BoR -- have been accused of raising their stake in the bank through front companies, while trying to give an impression that they have been reducing their holdings to comply with RBI norms on ownership in private banks. The stock closed at Rs 62, down 7% over the previous close, with 41 lakh shares -- four times the previous day''s volume -- changing hands on the NSE alone.

The regulator has banned 118 entities in all, including Pravin Kumar Tayal, the former chairman of BoR, Saurabh Pravin Tayal, Navin Kumar Tayal, Sanjay Kumar Tayal, promoter entities, and persons who it says fronted for them. The SEBI probe followed a reference from RBI which had spotted irregularities during its annual financial inspection of BoR.

According to the SEBI order, the shareholding pattern of BoR showed that the promoters had reduced their stake to 28.61% from 44.17% between June 2007 and December 2009. "On the contrary, they (the promoters) had actually increased their shareholding in a deceptive and fraudulent manner with the active connivance of others. The holding of the promoters (controlled by the Tayal Group) along with their front entities, had actually increased from 44.71% as at quarter-ending June 2007 to 60% as at quarter-ending March 2008 and stood at 55.01% as at quarter-ending December 2009," said the SEBI order, adding that no disclosures of these acquisitions were made to the stock exchanges.

The promoters and Tayal Group entities had made fund transfers to a string of finance companies which had a common director by the name of Girish Yadav, so that these entities could purchase BoR shares from the open market. Later on, the Yadav group entities made off-market transfers to a chain of Silvassa-based entities, controlled by the promoters of BoR.

"These Silvassa entities are located at addresses that are offices and manufacturing facilities of various other Tayal Group companies. Thus, the Yadav group and Silvassa group were acting in concert with the promoters of BoR to disguise the actual stake of the Tayal Group in BoR," said the SEBI order.

The order said there was sufficient evidence prima facie to indicate fraud in the dealing of shares by the promoters of Bank of Rajasthan.

(10-Mar-10)

The Economic Times

Bank of Rajasthan slumps on special audit

Tue, 09 Mar 2010 00:00:00 GMT

Mumbai: Bank of Rajasthan has slumped in early trades on news of audit of the bank's books and accounts.

The stock touched a high of Rs 64.25 upon opening. But it slipped 12% from its previous close to touch a low of Rs 58.60 soon. It is now down 6% at Rs 62.75. Over 683,000 shares have been traded on the BSE as against a two-week average trade of 404,000 shares.

Reserve Bank of India (RBI) has appointed two Deloitte entities to conduct a special audit of the private sector bank''s books and accounts.

Previously, too, the bank had faced trouble with RBI. The central bank has already appointed a new chief executive and two RBI officers on the bank''s board after many instances of corporate governance violations came into light. It also has appointed two nominee directors. In February 2010 RBI has imposed a Rs 25 lakh fine on the Jaipur-based private sector lender for violating regulations on five counts.

(09-Mar-10)

Business Standard

ULIPs better than Mutual Funds

Tue, 09 Mar 2010 00:00:00 GMT

Mumbai: Reacting to the criticism against ULIPs, the insurance regulator has brought about a number of changes in the way insurance companies structure these plans.

At the same time, there have been changes in the tax structure on ULIPs in the Union Budget.

Both these measures have worked out in favour of the investor.

If you are looking at a 20-year term, ULIPs charges work out to be more favourable than mutual funds.

In July 2009, IRDA had mandated life insurers to impose a ceiling on their ULIPs charges (except mortality/morbidity charges, which is the cost of providing insurance protection).

As per the notification, the difference between the gross return and net return (gross return minus the charges) for policies with tenure of up to 10 years should not exceed 300 basis points, while this gap is to be restricted to 225 basis points for those over 10 years.

The fund management charge for policies across maturities was capped at 135 basis points. Following the directive, insurers filed for revised products and phased out the older products by December 2009.

"The recent regulatory cap on charges has enhanced the attractiveness of ULIPs for customers through higher IRRs and incentives such as guaranteed loyalty additions for staying invested over the long term," says Vishal Gupta, director of marketing, Aviva Life Insurance.

(09-Mar-10)

The Economic Times

Rupee falls 3 paise to 45.55 a dollar

Tue, 09 Mar 2010 00:00:00 GMT

Mumbai: The rupee eased by 3 paise against the dollar in early trade on Tuesday after a six-day rally on fresh capital outflows by foreign funds and a firm US currency.

At the Interbank Foreign Exchange (Forex) market, the rupee fell by 3 paise to 45.55 a dollar.

The rupee closed higher by 8 paise at 45.52/53 a dollar in the previous session after hitting an eight-week high of 45.38 due to persistent selling of dollars by exporters and banks on continued capital inflows by foreign funds.

Forex dealers said the dollar gaining against other Asian currencies and a weak trend on stock markets weighed on the rupee sentiment.

Meanwhile, the Bombay Stock Exchange index Sensex fell by 41.31 points, or 0.24 per cent to 17,061.29 points in opening trade today.

(09-Mar-10)

The Times of India

Govt to reduce its holding in SBI to 51%

Tue, 09 Mar 2010 00:00:00 GMT

New Delhi: The government on Monday started the process to bring down its stake in SBI to 51% from the existing level of 59.4%. FM Pranab Mukherjee introduced an Amendment Bill in Lok Sabha, seeking to reduce government's holding in the bank.

The amendment would enable SBI to raise funds through follow-on public offer (FPO) or preferential allotment, said the statement of objects and reasons of the Bill. If the government's stake comes down through FPO of fresh equity shares, the bank will be able to raise around Rs 20,000 crore at the current price of Rs 2040 per share. On Monday, after introduction of the Amendment Bill, SBI's share price rose sharply by Rs 74 to Rs 2114. However, due to profit-taking, it finally closed at Rs 2070.

According to the present norm, government can't bring down its stake in SBI below 55%. The amendment will bring SBI at par with other public sector banks, in which the government can reduce its stake to 51% of the paid up capital.

The Bill said, "The Amendment Bill seeks to provide for enhancement of the capital of SBI by issue of preference shares, to enable it to raise resources from the market by public issue or preferential allotment or private placement. The Bill also aims to provide for flexibility in the management of the bank."

If Parliament passes the Bill, the government will be empowered to appoint not more than four managing directors. It proposes to abolish the post of vice-chairman and enable shareholders with at least Rs 5,000 worth of shares to contest the election for directorship of the bank.

The previous UPA government had first brought the Bill in Lok Sabha in December 2006 and it was referred to a Parliamentary Standing Committee. But the Bill lapsed due to dissolution of the House. The Bill introduced on Monday is broadly on the same lines as the lapsed one, but incorporates certain recommendations of the Standing Committee.

(09-Mar-10)

The Times of India

Microsoft says cloud could 'outsource' India's IT

Tue, 09 Mar 2010 00:00:00 GMT

New Delhi: Cloud services, or software/hardware services delivered remotely through the Internet, may be to Indian information technology companies what outsourcing was to the US IT industry, an official of Microsoft, the world''s largest software company, said.

The company, which on Monday announced it was opening up its four-month-old cloud platform in India to third-party developers, said such services are likely to force Indian IT professionals to ''upscale'' much as their US counterparts had to, when their work was outsourced over fibre networks to India.

"The cloud will take away some of that regular maintenance role. You have to see this as a continuum across the world. Think of the IT department in the US or Europe, they have been forced to upscale. For them, outsourcing was the catalyst, cloud could be ours," warned Microsoft''s India director for cloud services, Vikas Arora.

He was speaking at the launch of the company''s cloud platform, Azure, in India.

The company, which has reached out to 22,000 Indian developers in the last six months, is banking on getting its developer community -- the largest in the world -- embrace its cloud as their delivery platform.

Hundreds of Indian or India-based companies are already selling their products through Microsoft''s four-month-old cloud marketplace for the US called ''Pinpoint''.

Unlike traditional software, cloud-based products are not ''installed and run'' by the customer, but are run at large server or computer farms operated by Microsoft or other big firms.

Customers access the functions through the web and typically pay only a monthly usage charge.

Cloud operators design special versions of the existing programmes, such as an automobile-design software, that can accommodate more than one user or one firm at a time instead of the single-user programmes in use today.

As a result, they can, theoretically, serve a large number of companies using just one ''instance'' of a programme.

Around 75% of the global IT budget is currently expected to be spent just routine maintenance of running applications, due to the multiplicity of installed ''instances'' even in a single company.

While the cloud-based architecture is good news for most companies as they don''t have to buy or develop their own software or worry about maintaining them, it is also anticipated to make much of India''s current IT service providers -- specialised in application development, installation and maintenance -- superfluous.

It also threatens the business models of companies such as Microsoft and SAP, which get nearly all their revenues from the sale of packaged software to individuals or companies. For example, Microsoft''s office utility MS Office costs upwards of Rs 3,100 for the student edition, while Google''s cloud-based Google Docs service is cheap enough to be run completely on an ad-supported model.

Arora, however, denied Microsoft has been caught unawares by the cloudburst.

"We laid out our cloud strategy as early as 2008, when we said we are likely to see the evolution of a hybrid model. Between 2004 and 2008, we have been investing in extending our existing products to the cloud," he explained.

The company has already extended its email and video-conferencing software to the cloud model, but is yet to extend ''office'' and enterprise planning applications.

Microsoft said it has got a "very large number of clients" in India who are "very interested" in moving to the cloud.

Nearly all companies in India use Microsoft''s Windows operating system and around 70% of enterprise email solutions work on its ''Exchange'' platform.

For his partners and other IT services companies, Arora, felt that a transition to cloud as the primary IT delivery mode should be seen as an opportunity to ''upscale''.

IT departments will have to offer more than just ''we''ll run the computers for you'' and step into to ''business enablement'' by offering value added services than can expand the existing business.

Such value added projects, he pointed out, typically gather dust in many companies due to lack of IT manpower resources.

"The opportunity lies in realising that, I have been able to free my capacity up, how can I drive some of the new projects faster? There is no dearth of projects in the pipeline. I have seen organisations with projects in the pipeline for two years because nobody in the IT department could get to that.. CEOs are going to say to the IT team, you have partner with me rather than be specialised resources running my applications and infrastructure," he said.

The transition also brings with it huge opportunities, especially for enterprising software professionals. Platforms like ''Pinpoint'' - a one-stop shop to buy all kinds of cloud-based enterprise IT services - give an equal shot to a talented single developer as it does to a big corporation, by providing a platform to showcase his or her ware.

"This basically takes care of the go-to-market.. Anyone who has good idea... suddenly you can go from one user to a thousand users in a short while. They don''t need to set up a data centre or manage it, they can focus on what they know best. We have already seen it," Arora said.

The concept of providing a ready-made cloud infrastructure, including an app shop, in return for revenue-shares of upwards of 50% of the sticker price was pioneered by salesforce.com and Apple Inc.

Google and Amazon also offer similar services, but Microsoft is banking on its existing relationships with product developers to drive home its advantage.

With its Windows operating system running on around 90% of the PCs in the world, nearly all non-cloud product companies have an ongoing relationship with Microsoft.

(09-Mar-10)

DNA