Institute for Competitiveness, India is Launching the Porter Prize Named after Professor Michael E. Porter of Harvard Business School
New Delhi, Delhi, India (Institute for Competitiveness (Business Wire India))
Highlights
-- Coveted award ceremony to be held on September 28, 2012 in New Delhi
-- Aimed to recognize the strategic acumen of corporates in India
-- Companies will be awarded the Porter Prize across various categories
-- Nearly 26 companies have been shortlisted
-- Eminent jury members from academics, corporate world, ministries etc.
-- Initiated by Institute for Competitiveness, India
-- Professor Michael E. Porter will share his views at the event
-- Meeting place of more than 200 executives from various industries
Porter Prize is being organized in honor of the renowned philosopher; thinker, Harvard faculty member and Father of the modern strategic field, Professor Michael E. Porter.
Professor Michael E. Porter is a leading authority on competitive strategy, the competitiveness and economic development of nations, states and regions, and the application of competitive principles to social problems such as health care, environment, and corporate social responsibility. Professor Porter has been identified in a variety of rankings and surveys as the world's most influential thinker on management and competitiveness. He is the Bishop William Lawrence University Professor at Harvard University, based at Harvard Business School. A University Professorship is the highest professional recognition that can be given to a Harvard faculty member.
The award would look at recognizing the best of Indian companies whilst assessing them on a robust framework. The central idea of the Porter Prize is to propel companies to compete on the basis of value creation, innovation and strategy. This year we are looking at recognizing organizations operating in India who have shown exemplary strategic acumen under the categories of distinctive positioning, tradeoffs, fit, industry architectural shift etc.
Porter Prize is based on four pillars - capitalizing on industry dynamics, segmenting strategically, leveraging unique activities and exploiting tradeoffs. There are 16 industry-based classifications such as finance, banking & insurance, food & beverage, retail & wholesale etc. under which many renowned companies have applied. Clearly, it is an opportunity for the companies operating in India to get tested on the basis of their unique strategy and receive the prestigious Porter Prize award, which is first of its kind.
The assessment is a three stage process with stage one related to filing of nominations, The second stage comprise of strategy audit where more information about their organization pertaining to their framework, strategy, value chain etc. Around 26 companies had been shortlisted like HDFC Standard Life, SIDBI, Airtel, Cinepolis, Mother Diary, Cargill, Apollo Gleneagles Hospitals, ICICI Lombard, Sealed Air, Airtel etc. The third stage constitutes the jury process. The members of the Jury would further evaluate the results and help in deciding the winners.
Porter Prize would be given under the following categories --Industrial Architecture Shift --Creating Distinctive Value --Leveraging Unique Activities --Exploiting Tradeoffs --Creating Shared Value --Value Based Healthcare
In addition, there would be a winner in each of the industry-based classifications. Porter Prize will not only assess and award the best companies but will also assist the participating companies to get a deeper hold on their strategy and methods to further enhance it by making them understand their company's attractive and unattractive features etc.
The award ceremony on September 28, 2012 will have Sessions on Strategy and Shared value. In these sessions, experts from their respective field will express their views about strategy, innovation of products and services, etc. Moreover the shortlisted companies' executives will throw some light on their company's strategy and processes. Henceforth, Professor Michael E. Porter will share his thoughts on the award, overall process and Indian companies. Registrations are open for the people who are interested to attend the event at http://www.porterprize.in/register/
The Honorary Chairman, Institute for Competitiveness, Dr. Amit Kapoor said that "India represents a laboratory of strategies and Porter prize is not just mindful of but is more than happy to engage and celebrate with. It is confirmation of an arrival of India's paradigm of strategy."
Our insights partner Penn Schoen Berland (PSB) a global research based strategic communications advisory will unveil a poll of financial audiences to understand, 'What creates Financial Competitiveness'? Speaking on need and importance of such a poll Mr. Ashwani Singla, MD & CEO PSB said, "PSB helps clients gain the Winning Knowledge™ that they need to gain a competitive edge and Porter Prize is a perfect platform. As the Indian economy tries to regain its strength; companies have their own challenges as they struggle to sustain investor's interest. An initiative like this will help gain and understand of how to compete in receiving investor's attention and loyalty."
Many companies have partnered with the Porter Prize. It is supported by Indian Public Diplomacy, Ministry of External Affairs and is powered by Aircel. Indian Institute of Corporate Affairs (IICA), FSG, Titan Industries, are the award partners for the event, Penn Schoen Berland as the Insights partner, Dow Chemical International Private Limited as the Benchmarking Report and Coffee Table Book Partner, Outlook and Outlook Business are the Content Partner, Canon as Documentation Partner, The Leela Kempinski as the Hospitality Partner, Hammurabi & Solomon Consulting as the Legal Partner and The Viewspaper as the Youth Partner. The Media Partners for the event are Mint, Governance Now, exchange4media.com, and The Sunday Guardian.
About the Institute for Competitiveness
Institute for Competitiveness, India is the Indian knot in the global network of the Institute for Strategy and Competitiveness at Harvard Business School. Institute for Competitiveness, India is an international initiative centered in India, dedicated to enlarging and purposeful disseminating of the body of research and knowledge on competition and strategy, as pioneered over the last 25 years by Professor Michael Porter of the Institute for Strategy and Competitiveness at Harvard Business School. Institute for Competitiveness, India conducts and supports indigenous research, offers academic and executive courses, and provides advisory services to the Corporate and the Governments. The institute studies competition and its implications for company strategy; the competitiveness of nations, regions & cities and thus generate guidelines for businesses and those in governance; and suggests and provides solutions for socio-economic problems.
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----- Forwarded Message ----- From: ALPESH+DEVESH=A. D. ASSOCIATES <adassociates2004@yahoo.com> To: THANE CA GROUP <thaneCAs@yahoogroups.com>; VADODARA CA GROUP <vadodara_CA@yahoogroups.co.in>; Aurangabad CA Study Group <aurangabad_ca@yahoogroups.com>; ABHAY RAMBHAU NAIK <abhaynaik@bsnl.in>; ANIKET MUKUND PADHYE <aniketpadhye@sify.com>; ANITHA V.VISWANATHAN <anitha_rrao@yahoo.com>; ARCHITA HEMANT CHAUDHARI <archita.c@hotmail.com>; ARUN DHANARAM MALVIYA <arunmalviya@rediffmail.com>; ASMITA KAUSTUBH CHAUDHARI <asmi80@rediffmail.com>; AASAVARI ANADI BHASE <avbhase@rediffmail.com>; BALASUBRAMANIYAM SUNDARAMSHARDA IYER <bala_as31@rediffmail.com>; BHUPENDRA SHAH <bhupendrashahca@hotmail.com>; MAZHAR HUSSENI KHAMBATY <ca_mazharkhambaty@rediffmail.com>; XAVIER RAJAN <ca_xr@yahoo.co.in>; SARFARAJ ASSMOHAMMAD. ANSARI <casarfaraj@yahoo.co.in>; DUSHYANT CHAUDHARI <cdushyant@rediffmail.com>; PRASAD PANDHARINATH CHITRE <chitre_ca@yahoo.in>; 20 PRASAD P CHITRE <chitreprasad@gmail.com>; GOPAL DAVE <davegopalb@rediffmail.com>; 22 Haresh Mehta <hareshnmehta@yahoo.com>; 23 HEETEN LODAYA <heetenca@rediffmail.com>; 15 HEMANG COUSIN <hemang.bhaven@gmail.com>; 24 HEMANT GANESH JOSHI <hemjo1955@yahoo.com>; HIRAL KHIMCHAND SHAH <hiral_resh01@yahoo.co.in>; 26 jignesh chohan <jigneshchohan@rediffmail.com>; JAGADEESH V DEVADIGA <jvdevadiga@rediffmail.com>; 41 Kavita Aniket Padhye <kavita.aniketp@gmail.com>; CHARLES MICHAEL LOPEZ <kiranlopez@yahoo.com>; SUNIL GHISULAL KOTHARI <kothari_jain@hotmail.com>; KISHOR RATILAL DOSHI <krd_co@rediffmail.com>; KUMAR VAMAN MHATRE <kv_mhatre@yahoo.co.in>; LALIT PUNAMCHAND JAIN <lalitjainca@hotmail.com>; BHARAT KANTILAL MAJITHIA <majithiabharat@rediffmail.com>; ANKUSH JAGDISH MESTRY <mestryankush23@rediffmail.com>; Neeta Ashra <neeta@ashra.co.in>; HEMANT MANOHAR VAIDYA <nsjainca@gmail.com>; PARESH NAVINCHADRA SHAH <pareshnshah63@yahoo.co.in>; Dilip phadke <phadked@rediffmail.com>; Prakash Sangoi <prakashsangoi@hotmail.com>; PRAMODKUMAR ACHALKISHORE VYAS <pramodavyas@yahoo.com>; PRAMOD DATTATRAY DHAMANKAR <pramodpdc@rediffmail.com>; 37 CA. Rajesh Dedhia <rajesh.dedhia.ca@hotmail.com>; RASHMIKANT KANAIYALAL DAVE <rashmidaveca@hotmail.com>; RAVINDRA AJABLAL CHAPAWAT <ravindra_chapawat@rediffmail.com>; RAJESH LALJIBHAI GADA <rga1698@gmail.com>; SACHIN KORE <sachingkore@yahoo.co.in>; KALPESH PRAKASHCHANDRA SHAH <samarpanshah@yahoo.com>; PHILIP MICHAEL COLACO <sangeetapc@gmail.com>; SANJAY VASUDEO KULKARNI <sankul123@rediffmail.com>; SHYAM JAYARAM RAI <shyamrai98@yahoo.com>; STANISLAUS JOHN LOPES <stanny_lopes@rediffmail.com>; SUHAS KRISHNAJI KELKAR <suhaskelkar3860@rediffmail.com>; TARUN DILIP SAMPAT <tarun_sampat@hotmail.com>; 38 Tirthesh Shah <tirthu_shah@yahoo.co.in>; URMILA LAXMAN SAWANT <ulsawant@hotmail.com>; UMESH PURUSHOTTAM MESTRY <umesh.mistry@rediffmail.com>; VASAI BRANCH1 <vasai@icai.org>; VASAI BRANCH <vasaibranchca@hotmail.com> Sent: Friday, 31 August 2012 2:08 AM Subject: [aurangabad_ca] Copy of SC Order Dt. 28.08.12 regarding MVAT on Builders.
Pl. Find the copy of Supreme court Stay Order.
ITEM NO.1 COURT NO.7 SECTION III
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
IA 2/2012 in Petition(s) for Special Leave to Appeal (Civil)
No(s).17709/2012
(From the judgement and order dated 10/04/2012 in WP No.1152/2011
of The HIGH COURT OF BOMBAY)
PROMOTERS & BUILDERS ASSN.& ORS. Petitioner(s)
VERSUS
STATE OF MAHARASHTRA & ORS. Respondent(s)
( for directions and office report )
with
I.A. No. 2 in SLP (C) No. 17738 of 2012
[for directions and office report]
I.A. No. 2 in SLP (C) No. 21052 of 2012
[for directions and office report]
I.A. No. 1 in SLP (C) No. .... of 2012 CC No. 14240 of 2012
[for permission to file SLP and office report]
Date: 28/08/2012 These Petitions were called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE R.M. LODHA
HON'BLE MR. JUSTICE ANIL R. DAVE
HON'BLE MR. JUSTICE RANJAN GOGOI
For Petitioner(s)
SLP 17738 Dr. Abhishek Manu Singhvi, Sr. Adv.
Mr Amol Chitale, Adv.
Ms. Pragya Baghal, Adv.
Mr. Ardhendumauli Kumar Prasad, Adv.
SLP 21052 Dr. Abhishek Manu Singhvi, Sr. Adv.
Mr. Parimal Shroff, Adv.
Mr. Vinayak Patkar, Adv.
Mr. Mahesh Agarwal, Adv.
Mr. Ankur Saigal, Adv.
Mr. Gaurv Goel, Adv. for
Mr. E.C. Agrawala, Adv.
SLP 17709 Mr. Shyam Diwan, Sr. Adv.
Mr. Amol Chitale, Adv.
Ms. Pragya Baghal, Adv.
Mr. Nirnimesh Dube,Adv.
SLP ..CC 14240 Mr. Shivaji M. Jadhav, Adv.
For Respondent(s)
State of Maharashtra Mr. Darius Khambata, AG
Mr. Sanjay V. Kharde, Adv.
Mr. Chinmoy Khaladkar, Adv.
Ms. Nadiva S. Variava, Adv.
Mr. Preshit Surshe, Adv. for
Ms. Asha Gopalan Nair,Adv.
SLP 17738 Mr. Shekhar Naphade, Sr. Adv.
Mr. Sanjay Kharde, Adv.
Ms. Subhangi Tuli, Adv.
Mr. Sachin J. Patil, Adv.
Ms. Naira S. Variava, Adv.
Mr. Preshit Surshe, Adv.
UPON hearing counsel the Court made the following
O R D E R
I.A. No. 2 in S.L.P. (C) Nos. 17709, 17738 and 21052 of 2012:
We have heard Dr. Abhishek Manu Singhvi, learned senior counsel for the petitioners-applicants and Mr. Darius Khambata, learned Advocate General for the State of Maharashtra.
2. In the course of arguments, Mr. Darius Khambata, learned
Advocate General for the State of Maharashtra submitted that the time provided in Clause (l) of the Trade Circular dated August 6, 2012 for registration by the developers by August 31, 2012 would be extended by the State of Maharashtra to October 15, 2012 and the time for filing returns provided in clause (m) of the said circular would be extended to October 31, 2012.
3. Having regard to the above statement of the learned Advocate General, we are satisfied that the following interim arrangement shall subserve the ends of justice:
(i) The time for registration by the developers as per clause (l)
of the Trade Circular dated August 6, 2012 shall stand extended up to October 15, 2012 and the time for filing returns by the developers as per clause (m) of the said circular shall stand extended up to October 31,2012.
(ii) In case the concerned developers pay tax under the
Maharashtra Value Added Tax Act, 2002 (for short "2002 Act") as amended vide Section 2(24) w.e.f. June 20, 2006 on or before October 31, 2012, the coercive process for recovery of tax, interest or penalty shall remain stayed. This shall however not preclude the assessing officer to complete the assessment.
(iii) The above payment of tax by the concerned developers shall be subject to the final decision in the matter before this Court.
(iv) In case the amendment in Section 2(24) of the 2002
Act is held to be unconstitutional and the tax so deposited/paid by the developers is ordered to be returned by the State Government to the developers, the same shall be
returned along with interest at such rate that may be ordered by the court finally at the time of disposal of the matter.
4. I.A. No. 2 in S.L.P. (C) Nos. 17709, 17738 and 21052 of 2012 stand disposed of accordingly. SLP (C) ....CC No. 14240 of 2012: Permission to file Special Leave Petition is granted.
Delay condoned.
Issue notice.
Ms. Asha Gopalan Nair, advocate waives service for the
respondent Nos. 1 to 3. Notice shall be issued only to the
unrepresented respondents.
Tag with S.L.P. (C) No. 17709 of 2012.
|(Pardeep Kumar) | |(Renu Diwan)
|Court Master | |Court Master
CA. ALPESH SHAH + CA. DEVESH PARIKH = A.D.ASSOCIATES
Chartered Accountants
205, Apollo Shopping Centre,
Above Siddharth Hospital,
Station Road,
Virar(w).
(0250)2504082 / 3058482
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----- Forwarded Message ----- From: PRAGATI GUPTA <pragatics@gmail.com> To: csfratenity@yahoogroups.co.in Sent: Thursday, 30 August 2012 9:15 PM Subject: [csfratenity] Invitation for Panel Discussion on "Corporate Governance as Growth Driver for Small & Medium Enterprises" on 31st August, 2012 at CMA Bhawan, Gomti Nagar, Lucknow
Dear Members/Students,
Sub: Invitation for Panel Discussion on "Corporate Governance as Growth Driver for Small & Medium Enterprises" on 31st August, 2012
Greetings from Lucknow Chapter of NIRC of ICSI.
We are pleased to inform that the Lucknow Chapter of the Northern India Regional Council of the Institute of Company Secretaries of India is organizing a Panel Discussion on "Corporate Governance as Growth Driver for Small & Medium Enterprises" in association with Lucknow Chapter of Cost Accountantsfor professionals, Corporates & general public on Friday, the 31st Day of August, 2012 (4.00 PM to 6 PM) at CMA Bhawan, Vikas Khand – 1, Gomti Nagar, Lucknow – 226 010.
Panelist for discussion includes Dr. Upendra Kumar, Managing Director, UPTECH Computer Consutancy Limited, representing small & medium Enterprises, Shri S B Agarwal, General Secretary, ASSOCHAM, representing Industry Associations, CS Rupendra Porwal, representing Company Secretaries, CA Sanjeev Verma, representing Chartered Accountants, CMA K L Prabhakar, representing Cost Accountants & Shri Kuldeep Rawat, Head Mini CMC, Axis Bank Limited, Lucknow, representing Banks.
The program is likely to be participated by large no of Company Secretaries, Chartered Accountants, Cost Accountants & Corporate Delegates. Invitation card and background material is attached herewith.
U r absolutely correct. When coming for some training one should be prepared to do everything and any thing, according to the circumstances, situation, then and then you may know. If I tell you my history of my own life and trend , no body could do it in life. How a person passed 8th Grader and pursuing to SSC as a private candidate and through B Com, then a gap of 4 years and passing C A!!!!!!!!! What I did during article ship no body can do it now!!!!!!
C A Shah D J
USA
From: alpa christie <alpachristieandco@gmail.com> To: ICAI_CIRC_MEERUT_CA@yahoogroups.com Sent: Friday, 31 August 2012 6:03 AM Subject: {Amresh's CA's} Quality of fresh CAs
dear members,
looking at the their high attitude and low desire to acquire any kind of knowledge i have stopped taking articles since almost 10 years.
rather articles have stopped responding.
who ever comes to inquire for training; i tell them "evertyhing shall be done according to the rules of the institute" and none of them turn up again.
just recently a student came up, had a look at my office and inquired; "won't it be hot without any A.C. for the staff?" i asked him in return whether he lived in a centrally a.c. house?"
what would be the capacity of such a student?
i even had some fellow CA's advising me that an A.C. is a must these days and we should respond to the need of the day.
i am at a lack of response to such an incident!
CA alpa christie
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From: Dipak Shah <djshah1944@yahoo.com> To: AAYKARBHAVANGOOGLE <aaykarbhavan@googlegroups.com>; aaykarbhavan <aaykarbhavan@yahoogroups.com>; "ahmedabadcas@yahoogroups.com" <ahmedabadcas@yahoogroups.com>; ALWAR CA GROUP <ALWAR_CHARTERED_ACCOUNTANTS@yahoogroups.com>; aurangabadcas <aurangabad_ca@yahoogroups.com>; "awakenedcas@yahoogroups.co.in" <awakenedcas@yahoogroups.co.in>; C A Bhupendra Shah Mumbai <GlobalIndianCAs-owner@yahoogroups.com>; C A Dipak Jain <djain128@gmail.com>; C A Krishanlal Bansal <klbansal@gmail.com>; C A Madhusoodan Kakkad. <camnkakkad@gmail.com>; C A of Thane <ThaneCAs@yahoogroups.com>; C A Pune Groupd <casofpune-subscribe@yahoogroups.com>; CA News <CANEWS@yahoogroups.com>; "ca expert team@yahoogroups.com" <ca_expert_team@yahoogroups.com>; cacscw india group <cacscwaindia@yahoogroups.com>; "cacscwaindia@yahoogroups.co.in" <cacscwaindia@yahoogroups.co.in>; Chartered Secretaries <chartered_secretary@yahoogroups.com>; "Chartered_accountant@egroups.com" <Chartered_accountant@egroups.com>; chartered accountant <Chartered_accountant@yahoogroups.com>; "chartered_accountants@yahoogroups.com" <chartered_accountants@yahoogroups.com>; Company Secretaries Yahoo.Groups <aicsc@yahoogroups.com>; Company Secretary <company_secretary@googlegroups.com>; Company Secretary <company_secretary@yahoogroups.com>; CS A Rengarajan <csarengarajan@gmail.com>; CS <cs_companysecretaries@yahoogroups.com>; CS_MYSORE GROUP <csmysore@googlegroups.com>; Finpros Furum <finpros@yahoogroups.com>; ghaziabadca <ghaziabad_ca@yahoogroups.com>; icai-circ_ meerut <ICAI_CIRC_MEERUT_CA@yahoogroups.com>; itaxusers <itaxusers@googlegroups.com>; Jaipur CA <Jaipur_CA@yahoogroups.co.in>; JAIPUR CA JAIPUR CA GROUP <jaipurca@yahoogroups.com>; Jalgaon ICAI <jalgaon@icai.org>; Jalgaon C A <jalgaoncas@googlegroups.com>; lawprofessional Moderator <lawprofessional-owner@yahoogroups.com>; lucknow C A Group <lucknow-ca@yahoogroups.com>; lucknow <Lucknowca_reinvented@yahoogroups.com>; New Delhi CA forum <new_delhi_ca@yahoogroups.com>; "Panipat_CA@yahoogroups.com" <Panipat_CA@yahoogroups.com>; CA RUNGTA PD <pdrungta@gmail.com>; "Ranchi_Chartered_Accountants@yahoogroups.com" <Ranchi_Chartered_Accountants@yahoogroups.com>; roshan daultani <roshan_daultani2000@yahoo.com>; sankaramoorthy sankaralingam <ssmarchana@yahoo.com>; taxfin <taxfinsoft@yahoogroups.com>; VADODARACAGROUP <vadodara_CA@yahoogroups.co.in>; "Panipat_CA@yahoogroups.com" <Panipat_CA@yahoogroups.com>; "nicsi@yahoogroups.co.in" <nicsi@yahoogroups.co.in> Sent: Tuesday, 26 June 2012 8:37 PM Subject: [aaykarbhavan] Fw: No More Cess from July 1, 2012
----- Forwarded Message ----- From: CA. V.M.V.SUBBA RAO <vmvsrao@gmail.com> To: Kanigalla <kanigalla@hotmail.com> Sent: Tuesday, 26 June 2012 10:06 AM Subject: No More Cess from July 1, 2012
No More Cess from July 1, 2012?
JUNE 26, 2012
By K Vaitheeswaran, Advocate
A careful reading of the various provisions/notifications ushering in the new negative list based concept of service tax indicates that there are many pitfalls which are likely to cause difficulties for the Government.
Section 91 of the Finance Act (No.2) Act, 2004 levied education cess at the rate of 2% and Section 95 reads as under:
The Education Cess levied under Section 91 in the case of all services which are taxable services shall be a tax (in this Section referred to as The Education Cess on taxable service) at the rate of 2% calculated on the tax which is levied under Section 66 of the Finance Act, 1994 (32 of 1994).
A plain reading of Finance Act, 2004 indicates that education cess of 2% was levied on the service tax payable under Section 66.
Section 136 of the Finance Act, 2007 imposed Secondary and Higher Education Cess and as per Section 140, the cess was at the rate of 1% calculated on the tax which is levied and collected under Section 66 of the Finance Act, 1994 (32 of 1994).
The Central Government vide Notification No.22/2012 dated 05.06.2012 appointed 01.07.2012 as the date from which the provision of Section 66 of the Finance Act, 1994 ceases to apply except as respects thinks done or omitted to be done before the said Section 66 so ceases to apply. Section 66 ceases to exist from 01.07.2012 and Section 66B which is the new charging section for the levy of service tax is effective from 01.07.2012.
Section 66B reads as under:
"There shall be levied a tax (hereinafter referred to as the service tax) at the rate of 12% on the value of all services other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed."
Finance Act, 2012 has not made any amendment to Section 95 of the Finance Act, 2004 and Section 140 of the Finance Act, 2007 so as to enable the levy of Education Cess and Secondary and Higher Education Cess payable on service tax levied under Section 66B of the Finance Act, 2012.
Therefore when service tax as a tax is levied only under Section 66B, it may not be possible to levy education cess at 2% and secondary education cess at 1% which is a cess on a tax referred to in Section 66. With due respect, the Removal of Difficulty Order cannot be a solution since the cess is levied under Finance Act, 2004 and Finance Act, 2007 and has no connection to Section 66B introduced by Finance Act, 2012.
-- Best Wishes
CA. V.M.V.SUBBA RAO Chartered Accountant Door No.24-2-1885, I Floor, Flat No.5, Siddivinayaka Residency, I Cross, Central Avenue, MSR Nagar, Magunta Layout, Nellore-524 003 Andhra Pradesh India Mobile:+91 - 0 9390221100 +91 - 0 9440278412 e-Mail: vmvsr@rediffmail.com vmvsr@yahoo.co.uk http://pdicai.org/MyPage/203038.aspx
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Posted on Aug 30, 2012 at 10:40pm IST | Updated Aug 30, 2012 at 11:37pm IST
नई दिल्ली। कोयले की कालिख के पीछे आखिर क्या है। सच्चाई छिपी है IBN7 की खास पड़ताल BLACK GOLD में। एनडीए और यूपीए सरकारों के दौर में कई ऐसी कंपनियों को कोयला खदानें बांट दी गईं जिन्होंने सालों साल तक उन्हें छुआ तक नहीं। उल्टे कई कंपनियों ने तो इन खदानों को बेच कर मोटी कमाई की। सीबीआई अब उन सौदों की जांच कर रही है। सूत्रों के मुताबिक कोयले की कालिख में 17 कंपनियां घिरी हुई हैं। IBN7 को अपनी पड़ताल में 8 ऐसे मामले मिले जिसमें उन कंपनियों को कोयला खदाने बांटी गई जो सालों तक खदान पर कुंडली मार कर बैठी रही और बाद में बिक गईं। सीबीआई अब ये जांच कर रही है कि आखिर इस फॉर्मूले से कंपनियों को कितना फायदा हुआ। खास बात ये है कि इन कंपनियों को जरूरत से कहीं ज्यादा बड़ी कोयला खदान दी गईं। सवाल ये है कंपनियों को बैठे बिठाए मोटी कमाई करने का मौका दिया गया।
पहला खुलासाः पुष्प स्टील और माइनिंग कंपनी
20 जुलाई 2010 को दिल्ली हाई कोर्ट ने अपने आदेश में कहा है कि इस कंपनी का गठन 2 जून 2004 को हुआ। और इसी दिन दिल्ली से हजार किलोमीटर दूर कांकेर में इस कंपनी ने कच्चे लोहे की खदान के लिए आवेदन भी कर दिया। कोर्ट ने अपने फैसले में कहा है कि ये कैसे संभव है। आवेदन में न तो तारीख लिखी गई और ना ही कंपनी से जुड़े कोई कागजात लगाए गए। जबकि नियमों के मुताबिक आवेदन करने वाली कंपनी को पिछले साल के इनकम टैक्स रिटर्न की कॉपी लगानी जरुरी है।
कोर्ट ने ये भी कहा कि आवंटन की शर्तों में साफ है कि कोयला खदान उसी कंपनी को मिलनी चाहिए जिसके पास माइनिंग का अनुभव हो। लेकिन ना तो पुष्प के पास खनन का कोई अनुभव था और ना ही कंपनी की माली हालत इतने बड़े प्रोजेक्ट के काबिल थी। आवेदन करते वक्त कंपनी का पेड अप कैपिटल सिर्फ 1 लाख रुपए था। सवाल उठना लाजिमी है कि क्या कंपनी की मंशा सिर्फ आयरन और कोल ब्लॉक हासिल कर उससे मोटा मुनाफा कमाने की थी?
पुष्प स्टील ने 2004 में छत्तीसगढ़ सरकार के साथ 384 करोड़ रुपए के निवेश का करार किया। ये करार स्पांज आयरन प्लांट बनाने के लिए था। इसके लिए कंपनी ने 11 हेक्टेयर जमीन खरीदी और चीन की एक कंपनी को मशीनरी के लिए 22 लाख रुपए का एडवांस दिया। जी हां 384 करोड़ के प्लांट की मशीनरी के लिए 22 लाख रुपए का एडवांस। कंपनी का कुल निवेश 1 करोड़ 20 लाख था। लेकिन इसी आधार पर छत्तीसगढ़ सरकार ने 2005 में कंपनी को कच्चे लोहे के लिए माइनिंग लीज और प्रोस्पेक्टिव लीज दे दी।
इसके बाद कंपनी ने कोयला खदान के लिए आवेदन किया और उन्हें मध्य प्रदेश सरकार ने 2007 में 550 लाख टन कोयले वाला ब्रह्मपुरी ब्लॉक दे दिया। ये बताना जरूरी है कि छत्तीसगढ़ और मध्य प्रदेश दोनों जगह बीजेपी की सरकार थी। एक ऐसी कंपनी को सैकड़ों एकड़ की खदान दे दी गई जो दरअसल छोटी सी ट्रेडिंग फर्म थी। कंपनी ने अभी तक खनन का काम शुरू भी नहीं किया है।
दूसरा खुलासा - सवालों के घेरे में धारीवाल ग्रुप
कोयले का खेल कुछ ऐसा था कि गुटखा बनाने वाली कंपनी धारीवाल ग्रुप को भी कोयला खदान मिल गई। धारीवाल इंफ्रा नाम की कंपनी ने स्पांज आयरन प्लांट लगाने के लिए जमीन खरीदी और इसी आधार पर उसे 22 नवंबर 2008 को गोड़खरी कोयला ब्लॉक दे दिया गया। लेकिन 7 महीने के भीतर ही 240 लाख टन का ब्लॉक रखने वाली धारीवाल इंफ्रा ही बिक गई। इसे गोयनका ग्रुप की कंपनी CESC ने करीब 300 करोड़ रुपए में खरीदा। मजे की बात ये है कि CESC एक बिजली कंपनी है। यानी स्टील के लिए दी गई कोयला खदान पॉवर कंपनी के हिस्से चली गई। और सरकार तमाशा देखती रही। अपनी सफाई में धारीवाल ग्रुप ने सिर्फ इतना कहा कि माइनिंग लीज मंजूर नहीं हो पाई है और भूमि अधिग्रहण में भी दिक्कत आ रही है।
तीसरा खुलासा - नवभारत ग्रुप
विस्फोटक बनाने वाली कंपनी जिसे 13 जनवरी 2006 को स्पांज आयरन प्लांट लगाने के लिए मदनपुर नॉर्थ कोयला खदान दे दी गई। खुद का प्लांट न होने की वजह से नवभारत ने अपनी सहयोगी कंपनी के प्लांट के आधार पर आवेदन किया था।
उस प्लांट की क्षमता सालाना 3 लाख टन स्पांज आयरन के उत्पादन की थी। यानी हर साल कंपनी को तकरीबन 5 लाख टन कोयला की जरूरत थी। लेकिन सरकार ने उसे जो खदान दी - उसमें 3 करोड़ 60 लाख टन कोयला है। कुछ साल खदान पर कुंडली मार कर बैठने के बाद नवभारत ने अपनी कंपनी का 74 फीसदी शेयर किसी और को बेच दिया। यानी पूरी कंपनी ही बेच डाली गई। यानि कोयला बेचा किसी को लेकिन गया किसी और की झोली में।
चौथा खुलासा - फील्ड माइनिंग एंड इस्पात लिमिटेड
इस कंपनी को 8 अक्टूबर 2003 को दो कोयला खदानें - चिनोरा और वरोरा वेस्ट दी गईं। दोनों खदानों को मिलाकर कोयला उत्पादन की कुल क्षमता थी 380 लाख टन। फील्ड माइनिंग की प्रोजेक्ट रिपोर्ट के मुताबिक उन्हें सालाना 2 लाख 60 हज़ार टन कोयले की जरूरत थी। इस कंपनी ने 5 साल यानी 2008 तक खदान पर कोई काम शुरू नहीं किया। उसने स्क्रीनिंग कमेटी के सामने कहा कि वो जल्द ही स्टील प्लांट खरीदने वाली है। आखिर 2010 में फील्ड माइनिंग एंड इस्पात लिमिटेड को KSK एनर्जी वेन्चर्स ने खरीद लिया। KSK वर्धा में 600 मेगावॉट का पॉवर प्लांट लगा रही है। अपनी सफाई में फील्ड माइनिंग एंड इस्पात लिमिटेड ने स्क्रीनिंग कमेटी को कहा कि उनकी कंपनी को लेकर कोर्ट का कोई फैसला आया है। इसलिए वो काम आगे नहीं बढ़ा पा रहे हैं।
पांचवां खुलासा - बी एस इस्पात
बी एस इस्पात- 25 अप्रैल 2001 को विदर्भ की मरकी मंगली कोयला खदान बीएस इस्पात को दी गई। उनके पास 60 हजार टन का स्पांज आयरन प्लांट था। लेकिन उन्हें भी जरूरत से कहीं ज्यादा 343 लाख टन कोयले वाली खदान दे दी गई। उनकी जरूरत सालाना 1 लाख टन कोयला से ज्यादा नहीं थी। ये कंपनी 8 साल तक इस खदान पर यूं ही बैठी रही। 8 साल बाद कंपनी ने पर्यावारण क्लीयरेंस लेते वक्त कहा कि वो अपने प्लांट की क्षमता बढ़ाकर 1 लाख 84 हजार टन प्रति वर्ष करना चाहती है जिसके लिए उसे अब 3 लाख टन कोयले की सालाना जरुरत होगी। जानकारों का कहना है कि कंपनी ने जरूरत से कहीं बड़ी कोयला खदान पर पर्दा डालने की कोशिश में ऐसा किया था। अपनी सफाई में बी एस इस्पात ने साल 2010 में स्क्रीनिंग कमेटी को भरोसा दिलाया कि वो सितंबर 2010 तक कोयला उत्पादन शुरू कर देगी। लेकिन इसके बाद कंपनी ही बिक गई।
छठा खुलासा - सवालों के घेरे में गोंडवाना इस्पात
बी एस इस्पात की ही एक और कंपनी गोंडवाना इस्पात को भी 2003 में माजरा ब्लॉक आवंटित किया गया। इनके प्लांट की क्षमता 1 लाख 20 हजार टन कोयले की थी लेकिन अपनी प्रोजेक्ट रिपोर्ट में उन्होंने भी अपनी जरूरत 3 लाख टन प्रति वर्ष दिखाई। और कमाल देखिए उन्हें 315 लाख टन कोयले वाली खदान दे दी गई। यानि 100 साल तक की जरूरत आराम से पूरी। हम बता दें कि स्पॉन्ज आयरन प्लांट की औसत जिंदगी 30 साल की होती है। लेकिन अभी तक सबकुछ कागजों पर ही चल रहा था।
2008 में आकर गोंडवाना इस्पात का बी एस इस्पात में विलय हो गया। बाद में बीएस इस्पात को तीसरी कंपनी गरिमा बिल्डकॉर्प ने खरीद लिया और फिर 2011 में उसने ये कंपनी उड़ीसा सीमेंट लिमिटेड को बेच दी।
यानी न सिर्फ बी एस इस्पात ने खदान पर बैठने के बाद उसे मोटे मुनाफे में बेच दिया बल्कि खदान का एंड यूज भी बदल गया। फिर भी इन खदानों का आवंटन रद्द नहीं किया गया। आखिर क्यों? आखिर क्यों स्क्रीनिंग कमेटी और कोयला मंत्रालय सिर्फ कारण बताओ नोटिस जारी करते रहे। अपनी सफाई में गोंडवाना इस्पात ने कहा कि उनकी खदान का एक हिस्सा जंगल की जमीन पर पड़ता है इसलिए उन्हें वन विभाग की मंजूरी मिलने में दिक्कत आ रही है।
सातवां खुलासा - सवालों के घेरे में वीरांगना स्टील कंपनी
वीरांगना स्टील कंपनी- 2005 में मरकी मंगली नंबर 2,3,4 खदानें इस कंपनी को दी गईं। इनके पास एक पुराना 60 हजार टन का स्टील प्लांट था, उसके लिए जो खदानें दी गईं उनकी क्षमता थी 190 लाख टन। फिर भी कंपनी ने पांच साल तक खनन शुरू नहीं किया। आखिरकार 2010 में कंपनी का नाम बदल कर टॉपवर्थ हो गया। इसके बाद क्रेस्ट नाम की कंपनी ने उसे खरीद लिया। यानी ये कंपनी दो बार बिक चुकी है। जाहिर है नागपुर की इस छोटी सी कंपनी की बोली इसलिए लगी क्योंकि इसके पास बड़े कोल ब्लॉक थे।
आठवां खुलासा - सवालों के घेरे में वैद्यनाथ आयुर्वेद
आयुर्वेद उत्पाद बनाने वाली कंपनी वैद्यनाथ आयुर्वेद को भी 27 नवंबर 2003 में कोल ब्लॉक दिया गया। लेकिन 2010 तक भी ये कंपनी माइनिंग शुरू नहीं कर पाई। यहां तक कि स्क्रीनिंग कमेटी को ये कंपनी 2010 में भी ये भरोसा नहीं दिला पाई कि वो खुदाई कब शुरू करेगी और बिजली का उत्पादन कब शुरू होगा। 2011 में आकर आखिर 8 साल बाद स्क्रीनिंग कमेटी ने वैद्यनाथ को मिले कोल ब्लॉक को रद्द कर दिया। अपनी सफाई में वैद्यनाथ आयुर्वेद ने स्क्रीनिंग कमेटी को कहा कि माइनिंग प्लान को मंजूरी मिलने में देरी हो रही है क्योंकि कंपनी ने परियोजना का आकार बदल दिया है। साथ ही कंपनी में शेयर होल्डिंग पैटर्न भी बदल गया है।
उक्त आठ में से तीन मामले ऐसे हैं जब केंद्र में एनडीए की सरकार थी। इसमें से दो मामले विदर्भ के हैं। इस दौरान महाराष्ट्र में कांग्रेस की सरकार थी। यानी राज्य में कांग्रेस और केन्द्र में बीजेपी। ठीक वैसे ही जैसे 2004 के बाद केन्द्र में कांग्रेस और छत्तीसगढ़, मध्यप्रदेश जैसे राज्यों में बीजेपी की सरकार है। क्या ऐसे में दोनों पार्टियों को कोल ब्लॉक आवंटन पर राजनीति करने का अधिकार है।
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S. 391-394 scheme of arrangement is not a "tax avoidance scheme"
Vodafone Essar Gujarat Ltd ("transferor") filed a Petition u/s 391 to 394 of the Companies Act, 1956 to transfer its 'Passive Infrastructure Assets' to Vodafone Essar Infrastructure Ltd ("transferee") free of liabilities and encumbrances. The corresponding liabilities were not to be transferred. No consideration was payable by the transferee nor were any shares to be allotted to the members of the transferor. Post de-merger, the transferee was to be made a substantially owned company of a new company to be formed by all or some of the shareholders of the transferee. Thereafter, the transferee was to be amalgamated/ merged into Indus Towers Ltd. The application was opposed by the income-tax department on the ground that since no consideration was involved, the transaction was ultra vires. It was also claimed that the transaction did not fall within the anbit of ss. 391 to 394 but was a simple transfer between two separate entities to evade legitimate taxes which would be payable if the transaction was effected as a simplicitor transfer. It was also claimed that the Scheme was solely for purposes of avoiding tax. The Company Judge came to the conclusion that the transferee was a paper company and that the sole object of the Scheme was to avoid tax on income in excess of Rs. 3,500 crore and also stamp duty and VAT to the tune to Rs.600 crores. He accordingly refused to sanction the arrangement. On appeal by the Company, HELD reversing the Company Judge:
Exchange-traded funds (ETFs) are likely to be included in the list of avenues allowed for investments under the Rajiv Gandhi Equity Savings Scheme (RGESS) announced in the Budget.
A senior finance ministry official told Business Standard the final contours of the scheme were slated to be approved in a meeting convened by Economic Affairs Secretary Arvind Mayaram tomorrow. The scheme is likely to be notified next week. "Initial public offerings, follow-on public offerings and ETFs of stocks eligible under the scheme have been listed as avenues to be allowed," he added.
Investments in the top 100 stocks listed on the BSE and the National Stock Exchange (NSE), as well as in Navratna and Maharatna public sector undertakings, would be covered in the RGESS, according to the scheme finalised by the finance ministry. The official said this meant ETFs of stocks allowed for investment under RGESS, listed and traded on the exchanges, would be part of the scheme, which would include such funds floated by mutual funds.
THE FINAL CALL
Plan to notify the scheme next week
IPOs, FPOs and ETFs in list of investments to be covered under the scheme
Top 100 BSE, NSE stocks and specified PSU scrips to be part of it
Sebi suggestion to include mutual fund investments a difficult proposition
50% tax deduction on Rs 50,000-investment by first timers with annual income below Rs 10 lakh under the scheme
He, however, said though the Securities and Exchange Board of India had suggested allowing investments in mutual funds directly under the scheme, so far, no decision had been taken on this. For that, an amendment in the Finance Act would be required, he added.
He said investment in mutual funds did not align with the basic idea of promoting equity culture. On August 17, Finance Minister P Chidambaram had indicated the ministry would soon take a decision on Sebi's recommendation to provide tax benefits to equity mutual fund investors under RGESS.
A final decision in this regard is now expected to be taken by the finance minister, keeping in mind the difficulties associated with the proposal. And, if he decides to bring investments in mutual funds under the scheme's fold, the scheme would have to be reworked accordingly.
RGESS was introduced in Budget 2012-13 to attract retail investment in the stock market and expand the reach of the capital markets. The scheme has been designed to provide income tax deduction of 50 per cent on investments up to Rs 50,000 to first-time retail investors with annual incomes of up to Rs 10 lakh. Initially, the lock-in period for investments in the scheme was three years. However, this might be reduced to a year in the long run.
The official said after the one-year lock-in period, investors may trade among different securities, though the scheme would have a three-year maturity period. He added permitting small investors to purchase shares only in the top 100 stocks traded on the BSE and the NSE would act as safeguards.
A slew of non-banking financial companies (NBFCs) have lined up their non-convertible debenture (NCD) offerings ahead of the Reserve Bank of India (RBI) policy review on September 17. NCD issues worth more than Rs 2,000 crore are likely to hit the market in two weeks.
The Mumbai-based India Infoline Finance Ltd (IIFL) has already announced the launch of its Rs 500 crore NCD issue, while Religare Finvest Ltd, Muthoot Finance Ltd and Shriram City Union Finance Ltd have received the Securities and Exchange Board of India (Sebi) nod to raise Rs 500 crore each through NCD issues. In addition, SREI Infrastructure Finance Ltd, too, has got Sebi nod for a Rs 150-crore issue.
Experts say firms are scrambling to hit the market before the RBI monetary policy meeting to tap the demand from investors who are expecting the central bank to cut interest rates. Fall in interest rates, typically, results in capital appreciation in the value of bonds. Also, favourable response to the Rs 600-crore NCD issue of Shriram Transport Finance last month, has given much confidence to companies and bankers to launch their offerings.
FUND RAISING SPREE NCD issues worth over Rs 2,000 cr are likely to hit the market in the next two weeks
Issue size (in Rs cr)
India Infoline Finance
500
Shriram City Union Finance
500
Muthoot Finance
500
Religare Finvest
500
SREI InfrastructureFinance
150
Source: Sebi
NBFC firms are trying to attract investor interest by offering 150-250 basis points (bps) more than corporate bonds with similar tenures.
IIFL, whose NCD offering opens on September 5, has a coupon rate of 12.75 per cent on six-year bonds, about 135 bps more than the 11.4 per cent offered by Shiram Transport Finance last month. However, experts said IIFL being an unsecured issue yields on offer are higher, while it could be slightly lower for the forthcoming issues as all of these are secured NCDs.
"Typically unsecured bonds carry higher interest rates. Like in our case also, we are offering 12.75 per cent interest rate, which I guess would be typically 100-125 basis points higher then what secured bonds with similar kind of rating would have fetched," said Nirmal Jain, chairman, IIFL.
In the event of liquidation, secured bond holders get preference as they are paid out of realisation of security, while unsecured bond holders get paid before any money is paid to the equity shareholders.
Experts said not-so-favourable prospects of other asset classes will ensure the supply of paper coming into the market get absorbed by investors.
Akhil Mangla, executive vice-president, ECL Finance, said: "Investors are getting out of equities due to the volatility and commodities such as gold seemed to have peaked. Real estate is clearly not for the small investors. Given these circumstances, there is a clear demand for debt instruments with high coupon rates. Firms are keen to tap this demand."
Currently, 'AA-' rated corporate bonds with tenures of three to five years are quoting at yields between 10 and 10.22 per cent.
Mangla added the expectations that RBI would cut interest rates in its next policy was also driving up the demand for such issues.
Funds raised through NCDs help NBFC firms grow their lending book. As such funds qualify for Tier-II capital, it allows companies to boost their capital adequacy ratio.
No-frills demat account suited for irregular users
While depositories will take a hit, volumes might make it up for the loss
Neha Pandey Deoras & Tania Kishore Jaleel / Mumbai Aug 31, 2012, 00:13 IST
Angel Broking Executive Director (Operations) Santanu Syam says for many investors, maintaining a demat account is a pain because of the charges. The costs, such as maintenance and statement charges, make them the most expensive globally.
Obviously, Securities and Exchange Board of India's (Sebi) move to introduce no-frills demat accounts have been greeted with much enthusiasm amid players though it means a higher cost for the depositories. This is because many irregular investors simply chose to close down the account and shifted to less cumbersome instruments such as fixed deposits or physical gold.
This, along with the one page know-your-customer document that was introduced in January for opening of demat accounts, will make investing in stocks and gold exchange-traded easier.
For an individual, the new charges are quite low. There won't be any annual maintenance charge (AMC) for balances of zero to Rs 50,000. The no-frills account will charge Rs 100 for a balance of Rs 50,001-Rs 2 lakh. Presently, depository participants (DPs) such as banks and brokerages charge anywhere between Rs 300 and Rs 500 as AMC regardless of the amount in the account.
The no-frills banking experience
In 2005, the Reserve Bank of India (RBI) also proposed no-frills banking accounts. Account holders could maintain zero balance. In addition, the first cheque book was free and subsequently Rs 5 was levied on every cheque leaf.
However, such accounts have not helped banks to spread reach, neither have too many people entered the banking system through these routes.
According to public sector bankers, the incremental number of accounts through the no-frills option is barely one per cent. In fact, even the apex banker was not-too-happy with the banks as these accounts remained mostly on paper and no transactions took place.
In fact, RBI has told bankers recently to remove the no-frills tag from these accounts since it seemed like a stigma. Instead, they have asked to call it basic savings bank accounts.
While there could be a loss of revenue to depositories, Syam feels depository participants' revenues may not take a hit. "The loss of revenue on losing customers is much more than rationalising of account servicing charges. This way at least customers can be retained," he says.
In fact, many investors may just keep accounts dormant and use them when overall markets or gold ETFs are doing well. Many opted for physical gold because of the cumbersome process and cost factor – something that Sebi has eliminated.
Prithvi Haldea of Prime Database echoes Syam's thoughts. "Most depository participants have other bigger businesses such as banking or brokerage services. Hence, low margins in the demat business may be a negligible hit," he says. Standalone depository participants will certainly be impacted though there aren't many such firms, he says.
However, some disagree that things will improve substantially. Because existing demat accounts holding, with less than Rs 50,000, will get automatically converted into a BSDA (basic service demat account) from October 1. Thus, the business for depository participants will be impacted.
So, if a depository participant earned Rs 300 from your account a year, he will lose that once your account becomes no-frills.
COST OF DEMAT ACCOUNT SERVICES Sebi move on no-frills demat accounts could be good news for retail investors
Name
Account opening*
Annual maintenance charges (Rs)
Additional account statements (Rs)
ICICI Bank
Nil
500 ( 450 for e-statements)
20
SBI
Nil
400 (350 for e-statements)
30
Angel Broking
Nil
300
25
IIFL
Nil
555 (one-time) or Rs 250 a year
Nil
Geojit BNP Paribas
Nil
400
25
No frills accounts
Nil
Up to 50,000 = Nil 50, 001 to 2 lakh = 100
up to 25
*Stamp duty of Rs 20 and stamp paper of Rs 50 for power of attorney. Source: Company websites
K V S Manian, group head, retail liabilities & branch banking at Kotak Mahindra Bank feels it is too early to quantify the impact, but there will certainly be some, as the existing accounts earn much more than three times the charge prescribed for BSDA.
"In the short term, the loss in revenue will impact business, though it will be small," says Ajay Menon, chief operating officer at Motial Oswal Financial Services. Participants are working on possible solutions to the revenue loss.
Sebi has also given possible solutions. For one, it says if the value of holding in BSDA exceeds the prescribed limit, the depository participant may levy charges as applicable to regular accounts. And banks/brokerages shall reassess the eligibility of the demat account holder at the end of every billing cycle and ask eligible account holders to shift to BSDA.
"This apart, banks may opt to send only a half-yearly or yearly account statements to accounts which do not transact often unlike Sebi's suggestion of a quarterly statement. Additionally, there are chances of increasing the charges on non-BSDA. There could also be an additional cap of the number of transactions such accounts can do, beyond which you will be charged like a regular account (Sebi put a cap of holding value of over Rs 2 lakh)," says a public sector banker.
Unfortunately, industry experts do not see this initiative gaining traction. For investors to turn to equities, it takes good market or a good initial public offer, neither of which is happening right now.
The use of cash in financial transactions continues unabated, pointing to the prevalence of the black economy at the higher end of the income spectrum and the absence of financial inclusion at the lower end.
August 30, 2012:
The recent movements engineered by social activists run along two parallel lines. One group steered by Anna Hazare demands a Lok Pal Bill to wipe out corruption in the realm of government, and the other steered by Baba Ramdev, calls for unearthing of black money.
There are two dimensions of the black economy which are talked about -- the money stacked abroad in foreign bank accounts, especially Swiss banks, and the money accumulated or floating around in the internal economy.
Assuming that internally, the black money is accumulated through transactions which are not captured by the organised banking system, such transactions must be cash-based. The other alternative may perhaps be gold.
On the above ground, one of the demands of Baba Ramdev is to ban use of higher denomination currencies of Rs 500 and Rs 1,000. Is there any ground to believe that a large volume of cash transactions in the economy is shifting in favour of high denomination notes? We attempt to examine this point.
High Denomination Notes
On the composition of bank notes, the recently released Annual Report of the Reserve Bank says the following about the trend during the year ending March 2012, which fared badly in terms of economic growth: "At 12.5 per cent, the growth in value of banknotes outpaced the growth in volume terms (7.4 per cent) in 2011-12. Notes of denomination 500 and 1,000 together accounted for 82 per cent of the total value of banknotes in circulation."
During the last three years, the growth in high denomination notes of Rs 500 and Rs.1,000 was 20.5 per cent, 24.1 per cent and 14.9 per cent, respectively. This was much higher than the growth in total bank notes over the same period, viz., 15.7 per cent, 18.7 per cent and 12.5 per cent. Accordingly, the share of high denomination notes to total bank notes increased from 76.4 per cent to 81.6 per cent over the last three years.
Decadal Trend
The trend in the composition and growth of high denomination notes since 2002 shows that the situation in 2011-12 is no exception.
The compositional shift has been a continuous process, indicating that almost the entire value of bank notes at one stage may be held in high denominations (see table).
The growth in high denomination notes was significantly higher every year than the growth of bank notes as a whole.
And the growth in total bank notes also was perhaps larger than the GDP growth, indicating a high elasticity of bank notes to real GDP.
This is perhaps a sign of financial inclusion not succeeding and a larger volume of transactions still being handled in cash.
Between the years ending March 2002 and 2012, the total bank notes in circulation jumped from Rs.2.45 lakh crore to Rs.10.52 lakh crore, growing annually in the range of 12.4 per cent and 18.7 per cent.
On the other hand, the value of high denomination notes galloped from Rs. 0.75 lakh crore to Rs.8.60 lakh crore between the same years, growing annually in the range of 14.9 per cent and as high as 45.0 per cent.
In the very recent past, there has been some softening of growth rates in both total bank notes and that of high denomination notes. The former may be attributed to success of financial inclusion combined with slower economic activity.
Should the latter be attributed to the Anna Hazare or Baba Ramdev effect, or is it a reflection of substitution of currency with gold by hoarders of unaccounted money? It is anyone's guess.
Money Velocity
With increasing financialisation, one would normally expect that currency will be substituted by higher-end assets like bank deposits and other forms of financial assets.
Taking only the transactions demand for money, say, the currency and demand deposits, the ratio of currency to demand deposits should reflect a secular declining trend.
But, the currency to demand deposits ratio, after declining from 2.69 in 1961-62 to 1.00 around 1977-78, increased to 1.58 in 1978-79 and since 2001-02, it is hovering mostly in the range of 1.2 to 1.4.
From another angle, the velocity of currency, measured as a ratio of nominal GDP to currency, should reflect economising of currency in terms of a secular increase.
However, the velocity after increasing from 7.7 in 1955-56 to 12.92 in 1975-76, gradually decreased over the years and in the recent period, ruling in the range of 9.0 and 9.7 (See graph). This is despite the fact that a large volume of transactions has shifted to debit/credit cards in the last decade.
Yet another dimension of the same problem is how far the financial savings are still in the form of currency.
This is reflected in the variation of currency every year as percentage to change in total financial assets, including currency. Instead of decreasing over time, the saving in the form of currency to total financial saving of the household sector remained rather stubborn at around 10 per cent or above over the last decade.
Financial Inclusion
The above trends overall would show that financial inclusion should address both lower and the higher end of the economic spectrum.
At the lower end, it is true that about half the households are excluded from banking, and much more from other financial services like insurance and pensions.
At the higher end, it is not that they are not covered by the banking system, but there seems to be a huge volume of financial activity carried on cash basis which should be brought within the purview of the banking or the organised sector.
The other dimension of the problem is, of course, that of the external wealth hidden by domestic households abroad, which is a hidden reserve of the country not available due to capital flight.
(The author is Director, EPW Research Foundation. The views are personal.)
The jury is still out on who would be more disappointed if Kingfisher Airlines goes belly-up — the airline or State Bank of India (SBI). SBI leads the consortium of unpaid banks and financial institutions that have forked out funds to the airline.
Most of these lenders have already considered their exposure as a non-performing asset (NPA) in accordance with the guidelines of the Reserve Bank of India (RBI).
The SBI chief has called for a re-look at the NPA norms to prescribe standards that are in sync with reality.
In the past, whenever the economic environment has turned bleak, the Government has got going with a slew of measures — the stimulus package a couple of years back, relaxation in FDI norms in certain industries and deviation from accounting standards to permit capitalisation of exchange gains and losses being some examples.
During these times, the RBI has focused on managing interest rates and largely remained silent on tweaking NPA norms. All the glare and attention seems to have been focused on Kingfisher — a bit unfairly one could say — though there are other borrowers who are in a worse shape than the airline, and some who have even defaulted wilfully.
Prudential norms
As per present the RBI guidelines, NPA norms come into effect when an account is not funded for a period of 90 days. Assets are classified depending on how long they stay in the NPA category.
In the present economic environment, 90 days is considered too early to trigger NPA status. Even though other conditions such as collateral security and restructuring proposals would affect the NPA status of an account, there is a view that the RBI can be a bit more liberal in this regard.
Accounting standards are also keeping pace with the times. A change is recommended from the 'incurred loss model' to the 'expected loss model', to recognise impairment conditions existing in financial assets.
The International Accounting Standards Board has issued an exposure draft on the amortised cost measurement and impairment of financial instruments. The exposure draft proposes an expected loss model for recognising impairments on financial assets recorded at amortised cost.
Currently, both US GAAP and IFRS use an incurred loss model for recording impairments on financial assets. Under an incurred loss model, impairments are recognised only after a loss or trigger event is identified. An expected loss model would recognise loss estimates throughout the life of a loan (or portfolios of loans) and other financial assets recorded at amortised cost.
The Basel Committee on Banking Supervision's international accounting standards should be changed to improve how assets are valued when markets are illiquid or malfunctioning.
The International Accounting Standards Board should set standards to gauge "fair value" when the measures are unclear, and banks should record losses expected over the life of a loan portfolio earlier.
India is one of the countries that supports the expected loss model in the global move towards IFRS. Some experts have warned that the expected loss model would accelerate losses at the beginning of a downturn and, consequently, still have a pro-cyclical effect.
The Financial Crisis Advisory Group (FCAG) supports exploring alternatives to the incurred loss model, including the expected loss model and a fair value model.
The financial world sees a lot of merit in banks and financial institutions adopting Spain's system of forcing banks to hoard capital in good times to draw upon in bad. The European Union (EU) is following suit with draft rules.
IFRS in India
After maintaining a stoic silence over an extended period of time, the Government has now stated that it would soon move over to IFRS. Whenever that occurs, the RBI should be prepared with Prudential Norms for Income Recognition and Asset Classification.
Most banks and financial institutions in India are listed and, hence, they would certainly be in the first set of entities that move over to IFRS.
The task for the RBI is certainly cut out, as it has to balance a dark economic environment with aggressive accounting standards. Having done so in the past (for Indian accounting standards), this should not be a too Herculean a task for the RBI.
(The author is Bangalore-based chartered accountant.)
The Securities and Exchange Board of India on Wednesday amended its rules to allow promoters to use rights and bonus issue of shares for dilution of their stake to meet minimum public holding norms. Market regulator also said it would consider any further relaxation in this matter on case by case basis.
SEBI has allowed promoters to use rights and bonus issue routes to achieve minimum public shareholding norms only if they forego their entitlements. This means that promoters will have to necessarily refrain from subscribing to rights and bonus issues.
Foregoing the entitlement would enable promoters of listed companies achieve 25 per cent public shareholding by the stipulated June 2013 deadline. Every shareholder is entitled to subscribe to rights and bonus issues.
These are days when bankers across the world seem to have lost the confidence of the depositing public. They have been pilloried for greed and for awarding themselves fat salaries and golden parachutes.
But every now and then there are some glorious exceptions, who blaze a new trail. Ananthakrishna, Non-executive Chairman of Karnataka Bank, has set an example for bankers.
The occasion was the annual general meeting of the bank and the third item on the agenda was his reappointment as the part-time non-executive director of the bank. Though his appointment was approved by a majority, one of the shareholders opposed the resolution.
After the usual demands for increase in dividends, issue of bonus shares, and so on, all the agenda items came to an end. At the end of the meeting, Ananthakrishna explained the process how he was selected as Non-executive Chairman of the bank in 2009.
Then the board had fixed a salary of Rs 1 lakh a month for him. This was approved not only by the shareholders at the AGM, but also by the RBI and the Central Government. But surprisingly, he has not drawn his salary.
He said: "I have a policy. That is to earn the salary, and not to get the salary. I did not take it. As a non-executive director I get sitting fees, conveyance and halting allowance. I also get my pension. These help me meet my expenses."
There was a thunderous applause by the crowd, as he said: "I need your blessings".
These are days when bankers across the world seem to have lost the confidence of the depositing public. They have been pilloried for greed and for awarding themselves fat salaries and golden parachutes.
But every now and then there are some glorious exceptions, who blaze a new trail. Ananthakrishna, Non-executive Chairman of Karnataka Bank, has set an example for bankers.
The occasion was the annual general meeting of the bank and the third item on the agenda was his reappointment as the part-time non-executive director of the bank. Though his appointment was approved by a majority, one of the shareholders opposed the resolution.
After the usual demands for increase in dividends, issue of bonus shares, and so on, all the agenda items came to an end. At the end of the meeting, Ananthakrishna explained the process how he was selected as Non-executive Chairman of the bank in 2009.
Then the board had fixed a salary of Rs 1 lakh a month for him. This was approved not only by the shareholders at the AGM, but also by the RBI and the Central Government. But surprisingly, he has not drawn his salary.
He said: "I have a policy. That is to earn the salary, and not to get the salary. I did not take it. As a non-executive director I get sitting fees, conveyance and halting allowance. I also get my pension. These help me meet my expenses."
There was a thunderous applause by the crowd, as he said: "I need your blessings".
August 30, 2012:
The jury is still out on who would be more disappointed if Kingfisher Airlines goes belly-up — the airline or State Bank of India (SBI). SBI leads the consortium of unpaid banks and financial institutions that have forked out funds to the airline.
Most of these lenders have already considered their exposure as a non-performing asset (NPA) in accordance with the guidelines of the Reserve Bank of India (RBI).
The SBI chief has called for a re-look at the NPA norms to prescribe standards that are in sync with reality.
In the past, whenever the economic environment has turned bleak, the Government has got going with a slew of measures — the stimulus package a couple of years back, relaxation in FDI norms in certain industries and deviation from accounting standards to permit capitalisation of exchange gains and losses being some examples.
During these times, the RBI has focused on managing interest rates and largely remained silent on tweaking NPA norms. All the glare and attention seems to have been focused on Kingfisher — a bit unfairly one could say — though there are other borrowers who are in a worse shape than the airline, and some who have even defaulted wilfully.
Prudential norms
As per present the RBI guidelines, NPA norms come into effect when an account is not funded for a period of 90 days. Assets are classified depending on how long they stay in the NPA category.
In the present economic environment, 90 days is considered too early to trigger NPA status. Even though other conditions such as collateral security and restructuring proposals would affect the NPA status of an account, there is a view that the RBI can be a bit more liberal in this regard.
Accounting standards are also keeping pace with the times. A change is recommended from the 'incurred loss model' to the 'expected loss model', to recognise impairment conditions existing in financial assets.
The International Accounting Standards Board has issued an exposure draft on the amortised cost measurement and impairment of financial instruments. The exposure draft proposes an expected loss model for recognising impairments on financial assets recorded at amortised cost.
Currently, both US GAAP and IFRS use an incurred loss model for recording impairments on financial assets. Under an incurred loss model, impairments are recognised only after a loss or trigger event is identified. An expected loss model would recognise loss estimates throughout the life of a loan (or portfolios of loans) and other financial assets recorded at amortised cost.
The Basel Committee on Banking Supervision's international accounting standards should be changed to improve how assets are valued when markets are illiquid or malfunctioning.
The International Accounting Standards Board should set standards to gauge "fair value" when the measures are unclear, and banks should record losses expected over the life of a loan portfolio earlier.
India is one of the countries that supports the expected loss model in the global move towards IFRS. Some experts have warned that the expected loss model would accelerate losses at the beginning of a downturn and, consequently, still have a pro-cyclical effect.
The Financial Crisis Advisory Group (FCAG) supports exploring alternatives to the incurred loss model, including the expected loss model and a fair value model.
The financial world sees a lot of merit in banks and financial institutions adopting Spain's system of forcing banks to hoard capital in good times to draw upon in bad. The European Union (EU) is following suit with draft rules.
IFRS in India
After maintaining a stoic silence over an extended period of time, the Government has now stated that it would soon move over to IFRS. Whenever that occurs, the RBI should be prepared with Prudential Norms for Income Recognition and Asset Classification.
Most banks and financial institutions in India are listed and, hence, they would certainly be in the first set of entities that move over to IFRS.
The task for the RBI is certainly cut out, as it has to balance a dark economic environment with aggressive accounting standards. Having done so in the past (for Indian accounting standards), this should not be a too Herculean a task for the RBI.
(The author is Bangalore-based chartered accountant.)
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New Delhi, Delhi, India (Institute for Competitiveness (Business Wire India)) 
Exchange-traded funds (ETFs) are likely to be included in the list of avenues allowed for investments under the Rajiv Gandhi Equity Savings Scheme (RGESS) announced in the Budget.
