Patni

Patni buy-back to start from July 10... Tanti group,promoter of wind trubine maker Suzlon Energy, Bahrain firm in $2 bn JV...

Looming fears of an economic slowdown and budgetaryconstraints are driving corporate houses to bargain hard with hotelmajorsfor lower room tariff, industry officials said today.
As a result, the hospitality industry, besieged by spirallingcosts,slowdown in corporate travel on the back of rising airfare, andstagnantoccupancy levels are buckling under pressure.
"There is a pressure on the average room rate. Companies aretighteningtheir belt and cutting down travel. Hotels may not officially announcea ratecut but negotiated rates are likely to come down drastically," aseniorofficial of The Park Hotels told NewsWire18 on condition of anonymity. On their part, hotels are trying hard to hold on to their rackrates (thepublished full price for which hotel rooms are sold) at c

U.S. President George W. Bush said Asian giants China and India must sign on to measures to reduce greenhouse gas emissions in order to achieve a global agreement to combat climate change.Global warming, along with soaring gas prices and African aid, will be among the topics discussed at the Group of Eight summit that kicks off later Monday in northern Japan. G-8 leaders face major differences over how far to go in trying to set limits on pollutants that contribute to climate change == they are to be blamed more than anyone else

Infosys

infosys result soon eps revision from 92 to 100 reason cut in emplyee cost to revenu + dollar upward visa rupee at 18 pe expect to go upto 2100 if mkt bottomed out this will take index to level 4350 to 4650 till this expiry.

Hyundai Motor

Hyundai Motor, South Korea's biggest carmaker, slashed its 2008 domestic sales target by six per cent as rising oil costs and a weakening economy damp demand for automobiles

India in the short term and medium term is facing acute shortage in natural gas. The prices are ready to explode making power generation very expensive. This in turn can provide a scenario for hyperinflation. Three companies, namely Gujarat Gas Company Ltd, Petronet LNG Ltd and Indraprastha Gas Ltd were the biggest contributors to the growth in this index and moved up by 105%, 82% and 42%, respectively, during the period. Incidentally, all these companies belong to the natural gas sector, which is gaining ground as an important source of energy both in terms of price as well as availability.

NIOC

A senior official from the world’s fourth-largest oil exporter says crude prices will not hit $250 a barrel in the near future.

“I think there is no real prospect of crude skyrocketing to $250 a barrel this year,” said the Director of International Affairs at the National Iranian Oil Company (NIOC), Hojjatollah Ghanimifard.

UK PRIME MINISTAER Gordon Brown has urged families to make saving food as important as saving energy as he arrived for a crunch G8 meeting with world leaders. The prime minister said "unnecessary" purchases were contributing to price hikes that have left many people struggling to pay bills, a new report claims.

Coal.....

Coal Ministry, headed by Coal Secretary H C Gupta, decided to allocate the Behrabandh coking coal block to Vinod Mittal-led Ispat Industries on a sharing basis with Essar, Mukund Steel and Ind Synergy.

Of the total 170 mn tons reserves, Ispat Industries was allocated 70 mn tons, while Essar and Mukund 53 and 25 mn tons respectively. Orissa's Ind Synergy got the rest.

Coking coal is a major raw material for steel making in addition to iron ore.

Ispat Industries

Ispat Industries has signed a memorandum of understanding (MoU) with the Jharkhand government for setting up a 1980MW coal-based power plant having six units with an investment of Rs 80 billion,

Pharma

The country's leading drug makers, including Ranbaxy Laboratories, Cipla, Cadila Pharmaceuticals, Nicholas Piramal and Wockhardt, will soon withdraw about 60 drug combinations from the market. The voluntary move comes a little more than a year after the Central Drugs Standard Control Organisation (CDSCO), the central authority that approves new drugs for marketing, had asked the drug makers to withdraw the ‘combination drugs' as they are "unnecessary" and may pose health hazards. The Drugs Controller General of India (DCGI) had banned 294 combination drugs sold under nearly 1,053 brand names from the market in June 2007. Since then, the pharma industry and the the drug authority have been locked in a legal battle.

Double-digit inflation to stay for 3 more months

Rafiq Dossani is known for not mincing his words.

Just when Thomas L Friedman's The World is Flat, and Shashi Tharoor's The Elephant, The Tiger, and The Cell Phone, had taken the world by storm, Dossani penned India Arriving: How This Economic Powerhouse is Redefining Global Business. In the book, this Kolkata-born senior research scholar and executive director of the South Asia Initiative at the Shorenstein Asia-Pacific Research Center at Stanford University, presented an unflinching portrayal of an often romanticised and often misunderstood country.

Dossani, 53, teaches courses in South Asian development, identity and politics at Stanford. He had earlier worked with the Robert Fleming Investment Banking Group, has been the chairman and chief executive officer of a stockbroking firm in India, deputy editor of Business India and a professor of finance at Pennsylvania State University.

In an interview with rediff.com, Dossani spoke about the scourge of inflation, the United Progressive Alliance government's handling of the economy, and other issues. Read on. . .


ndia's inflation has scaled alarming heights. What long-term effect will it have on the country's growth?

Upto the 1980s, the inability to control inflation led to long-term inflationary expectations that had significant negative effects on growth. Corporates spent a great deal of time on managing inflation and less on genuine improvements in productivity. This led to a culture of asset creation rather than income generation.

So, it is important to bring inflation down. The government avoided raising petroleum prices until very recently.

This was a mistake because it had led to consumption decisions that have now to be revised sharply rather than gradually.

The Reserve Bank of India has hiked rates again to counter inflation. But won't it affect the GDP?

It will certainly do so, but was overdue, since rising inflationary expectations are probably worse than a modest drop in GDP. I expect growth to still exceed 7 per cent.


Do you think ill planning on the part of the UPA government led to this inflationary situation in India? Where does the lapse lie?

The political sensitivity to rising prices of essentials was behind the poor planning. The hope was that oil price hikes and commodity price hikes would reverse themselves. But, in the context of the weakening US economy, oil and commodities are hedges against a weak dollar. Since the rupee has recently weakened against the dollar, this made inflation the outcome of political sensitivities.

Indian Finance Minister P Chidambaram said recently that double-digit inflation is to stay for some time. When do you foresee a positive change?

I doubt if double-digit rates will continue beyond the next three months.

t is often said if US sneezes, India catches cold. What are your thoughts on the impact of the US recession on India?

As I said earlier, because of the weakening of the US economy, oil and commodities are hedges against a weak dollar. Since the rupee has recently weakened against the dollar, this made inflation the outcome of political sensitivities.

What measures should the Indian government take to bring down rising prices? Which sectors need to be focused the most?

I don't think the government has control over prices as it used to. It would be best to use monetary policy rather than taxes or controls.

n an interview you had said: 'Next Google will come from a small town in India.' Do you really think any small Indian town can be a hotbed of innovation?

There are several second tier towns that have come up well as centers of growth. I think innovation will come from there because they have domestic markets that can be catered to: Pune, Ahmedabad, Indore, for example.

What, according to you, is the state of entrepreneurial culture in India? How much remains to be achieved?

There has been a marked change for the better, one can see this is in the profitability of the small and medium enterprise sector. I think the main barrier is the high cost of starting business: high rentals, electricity deposits, phone costs: these are out of line with global costs.

Please share with us your observations on the Indo-US trade relations in the time to come.

They are on the upswing. Some sensitive technologies in telecom, materials, etc. remain out of bounds for Indian business, so there is still much to do on this front.

But, from perceptions of risk and as a place to situate a second headquarters to cater to the developing world, India is the natural choice for American multinationals.

Someone from Cisco mentioned last December at a conference on 'Services Globalisation' I had organised at Stanford: A 5.5-hour flight from Bangalore allows me to cover 70 per cent of the world's population.

What are the biggest challenges that the Indian and the US economy face at the moment?

The US faces the costs of subprime excesses and the deadweight costs of security: these are together in the trillions of dollars, so it will take a year or more to work through them. For the Indian economy, it has to be inflation.

Falling markets: Good to exit and re-enter?

The theory of reflexivity was first mooted by philosopher Karl Popper and then adapted by his famous chela George Soros. Reflexivity suggests that trends (social, cultural, religious or economic) are often amplified by feedback loops that make them stronger and more prolonged.

In particular, financial trends start from rational causes but are often prolonged to a point where prices swing far into the irrational. In the context of a market, a feedback loop can be understood simply as the price-amplification that occurs whenever profits are reinvested. A trader profits, reinvests those profits and makes more profits. Others bring in new funding in hope of emulation.

That's on the upside. On the downside, the feedback loop consists of selling that triggers more selling. Quite apart from panic situations, this can occur due to program-trading. One trader's stop-loss is triggered and he sells. That pushes prices down to hit a second stop-loss where another trader sells. That triggers margin calls that cause a third wave of selling, etc.

In the past few years we have definitely seen reflexivity at work. By May 2006, when the Nifty was trading at 3,650, valuations no longer justified buying Indian equities. The PE ratio was 20 and T-Bill yields were over 7 per cent. At that point the market crashed � there was a wave of panic selling.

But the correction was short-lived and prices surged again. The Nifty eventually rose 72 per cent to peak in January 2008 at 6,350 with an associated PE of 29. Throughout 2007 we saw reflexive buying as prices stayed consistently above fair-value.

Since then, index levels have fallen 35 per cent. We can't say that the correction has been reflexive because equity valuations are still rich at the current Nifty PE

of 17. Reflexivity would involve prices correcting to below fair value.

Incidentally the investors who exited in panic in May 2006 haven't necessarily done badly. In theory, those who stuck it out and liquidated in January 2008 earned 70 per cent return in 19 months.

In practice, relatively few people managed to liquidate anywhere close to the peak. Those who stayed continuously in equity have earned a total of about 12 per cent in two years � any FD-holder has done better than that.

If the current bear market turns out to be reflexive, prices could be driven a long way below fair value. What is fair value now? Assume a risk-free rate of 10 per cent � this is conservative with WPI at 11.4 per cent. Assume that Nifty earnings will grow at an average of about 15 per cent in 2008-09. A value investor would say a PE of 10 is justified on the basis of high interest rates while a PEG follower would be prepared to go up to PE 15.

If we allow for some degree of "fuzziness", the Nifty could therefore bottom in a band between PE 10-15. That works out to a price-band of Nifty 2,800-3,300. If the bear market turns reflexive, prices should drop till at least the lower end of that band. This is a frightening prospect but it is possible given history.

This would be the equivalent of about 55 per cent correction from the market peak and that has happened. A big bull run followed by a major correction followed by another big bull market is a familiar Indian pattern.

If you do decide to back the possibility of this bear market being reflexive, then you should be looking to exit now and try to re-enter below say, 3500. One danger is that if the market isn't actually reflexive you might wait forever!

If you aren't certain about the reflexivity or about your ability to time the exit-re-entry, there is not much point in selling at current prices. If you hold, you stand to lose another 20-25 per cent. If those are un-booked "paper losses", a 2-3 year perspective suggests eventual gains will be in the range of 50 per cent or more as the market gradually recovers back to 6,000 levels.

An average investor who has stayed committed to equity thus far should now be averaging down and buying on every dip rather than selling. A very good trader may be able to get out now and re-enter near the bear market bottom to maximise theoretical returns.

Most people simply are not that good.
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The confession of a finance professional

Every morning in the southern part of the country, mostly in my home state of Tamil Nadu, hundreds of astrologers sit below a shade, usually a tree and predict the future of their 'clients'. Their tool is a caged parrot. The mechanism - the parrot when allowed to come out of the cage is trained to pick one booklet from many that the astrologer spreads out.

And based on the clues printed in that particular booklet the astrologer predicts the future of his clients. Mostly the questions are predictable - problems relating to cash flows, business, finance, health, children and of course marriage. Years of experience has taught the astrologer to give non-standard yet satisfactory replies to these standard questions even to the most intelligent clients. Interesting, isn't it? Or is it mastery of the human psyche?

Cut to the metros. Every morning across the country, we the finance professionals begin our work as meticulously as the parrot-astrologers mentioned above, but with a crucial difference. Instead of the parrots we use laptops, and instead of the unsophisticated printed booklets, we rely on Microsoft office.

Without Excel spreadsheets and Power Point we will instantly be rendered hors de combat. Ask us any question about anything we will answer you only through these tools - even if it means introducing ourselves, our company or our services. We will use jargons or acronyms even for silly things. We have our own grammar for our operations.

The idea is to bamboozle our clients and give them an impression of being in a hurry. If a client is a multi-product company we would advice them on de-merging and concentrate on core competencies. If it is a single product company we would ask them to diversify to de-risk themselves. Never mind, in both cases we are actually experimenting with our clients at their cost.

And should a client have a rupee term loan we would advice them on a foreign currency loan and exactly the reverse should they have a forex loan. For the former we would predict the depreciation of the dollar, for the latter, the appreciation of the dollar. Who said cheese for the goose is cheese for the gander?

If we find a non-finance professional on the other side of the table we reckon that they are lambs to the slaughter. When we encounter fellow finance professionals on the other side, things are no different. After all, he would be compassionate to our cause, understand our jargons and empathise with our constraints.

In effect, others' ignorance (or their negligence) is our strength. We sell from the mundane to the complex, in the process warranting far above what we can deliver, causing much more havoc than what the clients could have ever imagined and charging much more than want is apparent. Welcome to the world of finance professionals and consultants.

You dream, we make money

We understand the fundamental human psyche far better than any other professionals with the sole exception of the parrot astrologer. We know the proclivity of businessmen to make quick money and the power of greed. We love such people. In fact, we encourage them to dream big, bigger and better. After all when you dream it is money for us.

Most of you don't waver. But if some of you do, we have the ready quotes of Shiv Kheras and Robin Sharmas of the world to motivate you, chosen with outmost care to be quoted out of context. Added to these are the real life stories of Narayana Murthys and Aziz Premjis. And when all these weapons are used, most of you fall. Only the extremely lucky escape from the heady brew that we concoct.

So, to a small timer we will recommend public issue. From being a partner of a small firm or to a private limited company, we play on his psyche and encourage him to go for a public issue. If his capacity today is 1000 MT, we easily work his profitability for 100,000 MT, never mind the availability of raw materials or ability of the person to market or any other fundamentals. Naturally profits one-hundred times the present levels can excite even a saint. Why talk of lesser mortals?

Surely, Excel spread sheets has made life easy for us. But to make life far simpler we have ready made templates, of course, with the usual disclaimers to cover our backs should something go wrong. Yet we occasionally goof up by denominating steel in litres or some liquid chemicals in meters. Our clients are very understanding - they do not find fault with us. How can they when we have bamboozled them in the first instance?

Our fundamental mantra is to calculate the earnings before Depreciation, Interest and Tax. Then we extrapolate such calculations to the next few years adjusting the prices to what we think is 'reasonable', never mind that the commodity prices are gyrating by the hour. If we decide, a four per cent variation can be serious. In the alternative a 40 per cent can be immaterial.

But if you still understand what we do, we will talk in terms of IRR, cash flows, MAT, dividend tax, tax-shield, leverage etc so as to flummox anyone. Management of most corporates wastes millions of precious man hours to check and recheck all these as if it were Bible, Koran and Veda all rolled into one. When all these happen, no wonder, we chuckle in front of you and have a hearty laugh behind you!

The next step is to approach banks for financing or other non-conventional lenders viz. venture capitalists and Private Equity. Here it is very easy for us. Since we have our own people on the other side of the table speaking our language, jargons and lingo, it becomes so easy. As we try to sell the dream of our clients, the finance professional sells his 'products'. And it takes two to a tango. Isn't it?

For us short term is few hours. Long term is a few days. And when something goes wrong we blame everyone from Bush, Iraq, Oil, Pakistan, Taliban and for that matter everyone except ourselves. And when people succeed we ensure that media covers the same adequately. On such occasions naturally we act with extreme alacrity and appropriate the credit.

Our relationship with these lenders means that it only we who can get you the funds or the facility. And when things go bad, it is only we who can bail you out. It is only our restructure package that will be accepted by these lenders. In tennis parlance - it is game, set and match for us. In chess, it is check and mate.

Horse multiplied by an ass is equal to a pig

The earnings of 30 companies that determine the BSE index is approximately Rs 1000 crores. We multiply the same with a price earning (PE - the Holy Grail) multiple of say 12 or 15 or even 21 to arrive at the BSE index. Much as all this is voodoo economics, when it is a bull market we point to markets that have a higher multiple and justify such higher prices. When it is a bear market we point out to markets with lower PE multiples to justify the market prices of shares. Either way you will lose.

Worse still, we move from channel to channel and from columns to columns using charts and what not to justify either the rise or fall in stock markets. And for the past six months we have first suggested resistance to NSE at 5,800, then at 5,400, then at 4,800, subsequently at 4,400.

In the process we had encouraged every small investor to stay invested. When all these levels have been broken, we have now suggested 3,700 little realising that an umbrella is of no use when you face a tsunami. Yet we continue without any shame or remorse to pontificate. How can you shame the shameless?

And when people survive all these, we tutor them to repurchase their shares or better still de-list. And should they have surplus cash even for a movement we move in silently as the big cats move in for their kill and make the gullible invest in commodities, real estate or some other exotic markets.

Better still, we advice on mergers or amalgamating with some other companies or better still sell the stake to others. Yes, in all these transactions we are interested.

And on all these, whether you make profit or loss, we would ensure that we make money first-up. Naturally, we see money in every transaction, why every part of a transaction. We would encourage one set to sell and other set to buy, and broker the deal both ways. Of course we do profit both ways. Did I hear that dirty word called ethics? Remember, we see value in everything except in values themselves.

But what is surprising is that despite what we do blatantly remains beyond the comprehension of many. Consequently as a class we remain un-critiqued. No wonder as the cliche goes, what is obvious is usually the most oblivious. This allows us, like the astrologer in the streets of South India, to endlessly play on the psyche of men and their greed.

PS: We believe, we can sell anything to anybody and buy anything from anybody. If only the PM had hired us, we would have sold even the nuclear deal to the Leftists.

Q1 results: Analysts hopeful, companies cautious

Few earnings seasons are awaited with such trepidation as the one for the June 2008 quarter. With the markets in turmoil, the Street is looking to India Inc to bail it out.

But expectations have never been more tempered; if analysts' estimates between 2004 and 2007 were often less flattering than what companies turned in, with constant upgrades becoming the norm, they are far more cautious today, taking care to pencil in even the smallest risk.

"The June quarter numbers should be reasonably good with earnings growing at around 15 per cent for the corporate sector as a whole because there was some momentum," said Rashesh Shah, chairman, Edelweiss Securities.

That would, however, be well below the 20-25 per cent growth seen over the past few years.

But then, the environment is becoming far more difficult because of high inflation and interest rates. Demand for products like cars and two-wheelers and even some consumer durables is flagging and even if companies are able to push volumes they don't always get the best price.

This means growth in revenues could well turn out to be lower than the previous quarters: a Morgan Stanley report forecasts that revenues, for a sample of 104 companies (excluding energy), could rise just 21 per cent in Q1FY09.

What's more, high commodity prices continue to push up costs for manufacturers, so a compression in operating margins cannot be ruled out - for the same sample, operating margins are likely to come off by about 50 basis points. Even in the March 2008 quarter, there were just a handful of companies in the top 100 that posted an increase in margins.

In addition, higher interest and depreciation costs are likely to eat into net profits even as companies earn less from other income - the growth in net profits is expected to be just 11 per cent for the June 2008 quarter compared with 25 per cent for the March 2008 quarter.

While advance tax collections may not be the best indicator of profits to come, the thought that they have risen at 32 per cent for the top 50 corporations against 38 per cent last year is not comforting.

The pace of credit growth is also moderating, though Paresh Sukthankar, executive director, HDFC Bank [Get Quote], said the latest credit growth numbers put out by the central bank of around 25 per cent suggest that demand for money has been reasonably good. "On average, banks should have been able to lend at around these levels," he said.

But the mood certainly isn't upbeat. "The mood is clearly worsening and we may well see a round of downtrading," said Hoshedar Press, executive director and president, Godrej Consumer Products [Get Quote].

Press said it's hard to pass on prices at the lower end and growth in some categories has been affected.

N Seshagiri Rao, Director, Finance, at JSW Steel [Get Quote], said steel has been selling well with capital goods and engineering driving demand. "The industry should certainly see far better volumes of at least 10-12 per cent than it did in the corresponding period of the previous year," he noted.

However, with domestic prices lower than global ones, realisations may not be encouraging, he pointed out. Margins are expected to contract most for sectors like engineering, cement, metals, construction and consumer staples thanks to rising input costs.

They could stay flat or slip marginally for technology firms since revenue growth is expected to be 8-9 per cent sequentially. Banks will take a hit on the investment portfolio and, with borrowing costs having risen, net interest margins could at best remain stable.

Telecom operators should do fairly well given the good growth in talk-time volumes as should healthcare firms that will gain from the depreciating rupee. Sectors such as retail and media may not give investors much to cheer about.

Some experts, however, are still optimistic. Said Nilesh Shah, deputy managing director, ICICI [Get Quote] Prudential AMC, "The results should be satisfactory. In fact, going by the advance tax collections, there could be some surprises."
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MTN may quit Reliance talks: Report

Caught in the middle of the Indian billionaire Ambani siblings' feud, South African telecom giant MTN is mulling walking away from talks for a possible amalgamation with Anil Ambani-led Reliance Communications [Get Quote], a report said on Monday.

"South Africa's MTN is considering walking away from a tie-up with Reliance Communications of India because of fears, an acrimonious spat between the Indian telecom operator's owner and his brother could leave the deal open to legal action," UK daily Financial Times reported.

Quoting an unnamed person familiar with the talks as saying that MTN and RCOM could extend their exclusive talks for another two to three weeks after the 45-day period expires tomorrow, the report said, 'there is no indication that extra time alone would be sufficient to resolve the feud' between Anil and Mukesh Ambani.

The deal, if fructifies, could create a combined entity worth about $70-80 billion, which would be one the world's biggest emerging market telecom firm.

While MTN and RCOM are said to be working on various deal structures, the FT report said there were 'mounting fears' that 'none of the myriad deal structures under discussion would insulate the combined company from Mukesh's lawyers.'

MTN would have to get the legal assurances (from RCOM) that they are in a position to defend themselves against a move from Mukesh-led Reliance Industries [Get Quote], the report quoted Morgan Stanley's telecom analyst Sean Gardiner as saying.

The deal has been clouded under uncertainties since RIL claimed right of first refusal in any controlling stake in RCOM and wrote letters to MTN and RCOM threatening legal action if its rights were breached. However, these claims are being contested by the Anil Ambani group.

Filing tax returns? A step-by-step guide

It's that time of the year again. You knew all along that it would come, whether you ignored or waited for it. The pages of the calendar have turned and you can hear colleagues waking up to it.

And you know you can't run away from it any more. We are talking about 31 July, the day we are reminded of our bondage, the price we have to pay for many of the good things in our life.

This happens to be the last day for filing income tax returns for all salaried Indians, be they resident or non-resident. Of course, you must have done everything legally possible to maximise your freedom from this bondage called tax. But then, the law permits you only that much. The rest, as they say, is illegal.

You might also have wondered about the word return being used for an outgo. Maybe it's because governments always want citizens to see things from their point of view, perhaps for the larger good.

Filing of tax is compulsory for everyone whose gross total income - the income under the five heads (salary, business, capital gains, house property or other sources) before allowing for any deductions such as insurance premium - exceeds the basic exemption limit.

For financial year 2007-08 (assessment year 2008-09), this limit was Rs 145,000 for women below 65 years of age, Rs 195,000 for senior citizens (above age 65 years) and Rs 110,000 for any other individual. It is compulsory for every person exceeding these limits to file the return before the prescribed date, even if their employer has taken care of their tax liabilities by reducing their salaries by the necessary amounts before paying the rest to them. Paid this way, it is known as tax deducted at source or TDS.

Filing of the form

There are two income tax return forms, ITR-1 and ITR-2, for salaried individuals. Your sources of income (they will fall under one or more of the five sources mentioned earlier) will decide your form. You will have to submit the filled form to the tax authorities and get an acknowledgement from them.

Income source decides return form

ITR-1: Income from salary, pension and interest earned in a financial year

ITR-2: Capital gains, income/loss from house property and income from any other source

Use ITR-1 to file your tax return if your income is from salary, pension or interest. In case of any capital gains, income or loss from house property and income from any other source, you will have to use ITR-2. You can go to www.incometaxindia.gov.in/download_all.asp to download these forms.

You will find ITR-1 relatively simple to fill up. A prerequisite for the exercise is Form 16, the certificate that comes from the employer showing the TDS from the income chargeable under the head salary. ITR-1 is almost a replica of Form 16. All you have to do is pick the numbers from Form 16 and put them in the ITR form.

Apart from salary income, there is an important component of income that many taxpayers ignore while filing their returns. It is the interest income earned from the funds lying in savings accounts in banks. Disclosing that, however small it may be, is mandatory.

You just have to add the total interest credited to your bank account in the last financial year. Scrutinise your income tax return to ensure that no taxable income is undisclosed. After you file your return, the tax authorities will hand you an acknowledgment. That's it, you are through with the filing of returns.

You will need to fill up ITR-2 if you, as a salaried individual, have made any capital gains. This form is filled in the same way as ITR-1. In addition, you will have to fill in income, if any, from house property and other sources.

How to file

The actual filing of return can be done either by using the traditional paper form or electronically, over the Internet. The second, known as e-filing, is fast catching up. The digital method is compulsory for companies, but optional for salaried individuals still. However, it may well become compulsory for individuals with a certain level of income in times to come. So, it may not be a bad idea to familiarise yourself with this process.

Before you start filing the return, check if you would be getting a refund from the IT Department or have to pay tax. In case of the latter, even before starting the filing process, you should first get hold of Form 280, fill it up and deposit it any bank along with the tax payable in cash or cheque. You can also pay tax through Internet banking. In both cases, you will get a receipt number which has to be quoted in the ITR form.

Checklist

* Keep ITR-1, ITR-2 forms handy

* Enter all the details in CAPITAL letters

* Ensure that name, address and other personal details are entered correctly

* Double-check PAN number, bank account details and the MICR code you write

* Store the acknowledgement safely property and income from any other source

Doing it offline

There are two options - you may either submit the ITR form at the nearest income tax office after filling it up yourself, or you may get a chartered accountant or a tax return preparer to do it for you. Try to visit the ITO well before the last date for filing return as crowds increase as 31 July draws near.

You may also take help from the public relations officer of the ITO to fill the form. No documents or investment proofs need to be attached with the form, but remember to bring photocopies or originals with you to the ITO. These will come in handy if you are asked to authenticate the maths.

The fee of a CA would depend on your income slab and the number of income sources. Typically, it would range from Rs 300 to Rs 2,000, depending on the complexities involved. One good thing about filing through a CA is that it would bring down the margin of error to nil. Also, depending on the acumen of the CA, which often gets reflected in the quality of his practice, he would suggest some tax saving ways to you for the future.

Doing it online

E-filing is done through sites authorised by the IT Department to file taxes on your behalf. To e-file, you will have to input the details of Form 16 in the software of the website, which would automatically generate an electronic return in XML format.

This format helps in sharing of structured data across different information systems. A PDF file of the relevant ITR form is also created along with the XML format. You can download this ITR form, submit it at the ITO and get an acknowledgement.

Save the XML file to your desktop and then upload it on incometaxindiaefiling.gov.in - the IT Department site. Some sites also have provision for online payment of tax. Use of a digital signature will render the e-filing process complete without involving paperwork and visits to the ITO.

In case DS is used, the acknowledgement will be emailed to you. If you upload the file on the tax department's site without the DS, the acknowledgement, called ITR-V, emailed to you will have to be submitted at an ITO within 15 days of downloading it. A DS can be acquired from any of the agencies authorised by the government for the job, including the private and government websites meant for filing tax returns.

E-filing is not just convenient and saves time, it can also be done from anywhere. What is especially important is that the online method reduces or even eliminates the interface between the tax assessee and tax officials.

Online sites

Among the major sites offering e-filing facilities are Taxspanner, Taxsmile and Taxshax. You can either take printouts of the relevant ITRs from these three sites and physically submit them or upload your XML file on the IT Department's site.

Taxspanner uploads the taxpayer's file directly and emails ITR-V to him. With Taxsmile, you can submit the forms at any of its offices spread over the country. They will then forward it to the ITO.



All the three sites are secure and easy to navigate. The major difference among them is on two counts - the number of income sources covered and the process. Get clarity on the cost and features offered. The minimum cost package would normally be only for salary income. The advanced version might be required if you have income from other sources.

The tax sites also differ in the way they ask for information and allow you to input figures. Taxshax gets most of the figures filled up in a single page. Taxspanner has a step-by-step guide and takes one piece of information on one page. Taxsmile gives both these options.

Use of DS raises the cost of e-filing. The amount of this increase varies across tax sites. A DS can be obtained from Taxsmile for Rs 500. Apart from this, you will have to pay for the basic package. Your DS comes with a validity period, after which it has to be renewed.

A DS from Taxspanner, for example, is valid for two years. This site offers a deal in which you can file returns for three years at a cost of Rs 250 a year. To get your DS from a tax site, download the relevant form from it, attach the required documents, such as your identity and address proofs, and courier them to the address concerned. The entire process of acquiring a DS may take around 15 days.

A tax return can also be filed from the government site - incometaxindiaefiling.gov.in/portal/index.jsp - meant for it. Your PAN will work as the username for registering at this site.

Should you go online?
Internet accessibility is growing, but it is still out of reach for many of the 40 million taxpayers. For those who have access to it and want to save time, the digital signature way looks ideal - you will be able to file the return in a few minutes from the comfort of your home or office. E-filing without the DS is almost the same as filing returns offline.

Tax laws can often seem like a cross between a Rubik's cube and Mutthiah Muralitharan's spin bowling. The three private tax sites get around this by making themselves friendly to taxpayers and not making filing of return dependent on an intricate understanding of the workings of tax laws. They empower with information and knowledge while taking the taxpayer step-by step through the entire process of tax filing. The details of the return filed get saved in the database of these sites and can be accessed anytime in the future.

If you have any specific doubts concerning the filing process, email the tax site to clear them. Getting clarity is important as some sites do not include things like income from business or profession, losses of earlier years brought forward or clubbed income. If tax is due, check if you can pay it through the site.

Stick to the deadline

Whether you are going offline or online, make sure your are on the right side of 31 July. If tax is due and return is not filed till 31 March of the following year, a penalty of Rs 5,000 is levied. Penalty may also have to be paid in the form of interest. Check out the answers on the next few pages to some frequently asked questions to get on top of tax returns. And then go ahead and file with a smile.



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Sunil Dhawan, Outlook Money

Section 80C, tax planning and investments

Learning how to plan your taxes is a major part of choosing an investment strategy. In this article we will look at Section 80C, one of the most important provisions for investors in the tax laws.

What is Section 80C?

The government, in order to encourage savings, gives tax breaks to certain financial products as discussed in Section 80C of the Income Tax Act. These investments are often referred to as 80C investments.

Up to a limit of Rs 1 lakh, the money that you invest in these products is deductible which means that you don't have to pay income tax on it. Thus if you are in the 30 per cent tax bracket and you invest the maximum allowed you save Rs 30,000 in taxes.

There are a wide range of investments you can make to claim the Section 80C benefit. To keep things simple we will focus on two categories: Small savings schemes and ELSS (equity linked savings schemes). Other 80C products include your provident fund, the repayment of principal on your home loan and your life insurance premium.

Small savings schemes

These include the public provident fund (PPF) and National Savings Certificate (NSC). They offer a return of around 8 to 8.5 per cent which is quite low compared to typical returns in equity products. Furthermore, there is a relatively long lock-in period, 15 years for the PPF and 6 years for the NSC. Their main advantage is that they offer a guaranteed return unlike equity-based products.

Equity linked savings schemes

These are basically mutual funds which are specially created to provide tax benefits. As with regular mutual funds there is no guaranteed return and you can lose money in a period of falling stock prices as has happened in the first half of 2008. However, ELSS usually provides a higher return than small savings schemes and also a lower lock-in period of three years.

Examples of ELSS include Franklin India Taxshield and HDFC [Get Quote] Taxsaver. As with regular mutual funds, these schemes pursue a range of investment strategies: For instance, some may focus on large cap stocks while others may focus on small and mid cap stocks. It makes sense to invest in more than one scheme to diversify some of your risk.

Making a choice

How do you decide to allocate your Rs 1 lakh 80C limit? This will depend on your other financial decisions; for example whether you have taken a home loan or purchased life insurance. As to the decision between small savings schemes and ELSS two of the most important factors are your attitude to risk and inflation.

As recent months have shown so clearly, stock markets are a lot riskier than small savings schemes. However, the flip side is that riskier investments like stocks offer a higher rate of return particularly over the long run. From the perspective of a young investor who may not need most of her/his investment money till retirement it probably makes sense to tilt towards riskier assets.

The other important consideration when evaluating returns is to adjust for inflation.

In other words, if your investment generates a return of 8 per cent and inflation is 7 per cent, then your inflation-adjusted return is only one per cent. When inflation moves into double digits you are actually making a negative inflation-adjusted return, as is happening currently. This is a fundamental problem with any investment product that offers a fixed return at a time of high and rising inflation.

By contrast stocks are a better hedge against inflation especially in the long run. Though inflation increases the costs of firms it also allows them to charge a higher price to their customers thereby protecting profits to some extent. This in turn means that stock prices and equity-based products can offer better protection from inflation over a number of years though not necessarily in the short run.

What about the element of timing when it comes to equity schemes? For instance, stocks have clearly taken a pounding in the last six months. However this doesn't necessarily mean it's a bad time to invest in stocks; valuations in some companies look quite attractive now and over a three-year horizon you could see decent returns.

From the point of view of the average investor it's probably best to take timing out of the picture by following a systematic investment plan which means you invest a fixed amount every month.

Small savings schemes and ELSS each have their advantages and disadvantages. Based on your investment strategy and particularly your attitude towards risk you have to choose how much to invest in them as part of your Section 80C investments.

Source : rediff.com

Left to submit pullout letter by Thursday

The Left parties will submit by July 10 to President Pratibha Patil [Images] their letter withdrawing support to the UPA government, Forward Bloc general secretary Debabrata Biswas said on Monday.

The decision was unanimous, said Biswas.

The Left leader's comments came immediately after the government sent a letter to Left before the July 7 deadline expired.

The UPA government, in the letter, has expressed its wish to hold another round of meeting with the Left Parties to explain its position on the Indo-US nuclear deal.

Factors - Market Will Take Cues from Going Forward

Monsoon this year

India's monsoon has been 21% above average so far this season. A
normal monsoon may lift farm production, which accounts for a fifth of
the economy, and cool the nation's fastest inflation rate in 13 years.

Developments on the Political Front

The Indian government is seeking support from the Samajwadi Party
(SP), a key regional party in Uttar Pradesh to retain power at a time
when Left parties are on the verge of withdrawing support. SP party
leaders on Friday, 4 July 2008, met Prime Minister Manmohan Singh and
hinted that they would approve the deal.

Communist parties on Friday, 4 July 2008, said the government must
tell them by Monday, 7 July 2008, if it plans to press ahead with the
next step in a controversial civilian nuclear deal with the United
States. Left parties have threatened to end their backing for the
government if it seeks approval for the deal from the International
Atomic Energy Agency (IAEA), the next international move needed to
operationalise the pact.

Selling by Foreign Institutional Investors

Sustained selling of Indian stocks by foreign institutional
investors (FIIs) has dented market sentiment. FII outflow outflow in
calendar year 2008 totaled Rs 26571 crore (till 3 July 2008). Now the
next path would also be decided by how FII reacts to current situation.

High inflation, record high global crude oil prices and rising interest rates are near term threats to market growth.

We all are eyeing on Infosys starting June 2008 quarter earnings season on Friday, 11 July 2008.

U.S. President George W. Bush said Asian giants China and India must sign on to measures to reduce greenhouse gas emissions in order to achieve a global agreement to combat climate change.Global warming, along with soaring gas prices and African aid, will be among the topics discussed at the Group of Eight summit that kicks off later Monday in northern Japan. G-8 leaders face major differences over how far to go in trying to set limits on pollutants that contribute to climate change == they are to be blamed more than anyone else

Looming fears of an economic slowdown and budgetaryconstraints are driving corporate houses to bargain hard with hotelmajorsfor lower room tariff, industry officials said today.
As a result, the hospitality industry, besieged by spirallingcosts,slowdown in corporate travel on the back of rising airfare, andstagnantoccupancy levels are buckling under pressure.
"There is a pressure on the average room rate. Companies aretighteningtheir belt and cutting down travel. Hotels may not officially announcea ratecut but negotiated rates are likely to come down drastically," aseniorofficial of The Park Hotels told NewsWire18 on condition of anonymity. On their part, hotels are trying hard to hold on to their rackrates (thepublished full price for which hotel rooms are sold) at c

8 SUMMIT*WILL TAKE SOME STEPS TO CONTROL*CRUDE RIDE*SAME TIME OUR P.M.WILL CLEAR*N-DEAL**YES OR NO*IF YES*WILL GIVE +VE SIGNAL TO*FII*WILL CHANGE -VE VIEW*
GOLDEN CLUB: BSE*13-786*IMP TO CROSS & HOLD FOR STRNG MRKT*RESULT MONTH WILL GIVE LOTS OF TRDNG MOVE TO SMART PLAYER*FRONTLINER WILL MORE ACTIVE*MIDCAP*WILL JOIN SLOWLEY

Book Review: The Polyester Prince – The banned biography of Dhirubhai Ambani

Book Review: The Polyester Prince – The banned biography
of Dhirubhai Ambani

This book on Dhirubhai Ambani’s Empire is a
thrilling experience as it talks about the toughest times of Reliance which has
gone into the making of it and is kept away from public domain for obvious
reasons. Even if people close to Ambanis are aware, they don’t dare to speak
against the mightiest and the fastest growing invulnerable business house of
India. RIL as on date is the
most profitable and most revenue generating private company of India
and the tactics (yes, the word is used deliberately) used by Late Mr. Dhirubhai
Ambani which has become the trademark of the group may be appreciable in terms
of financial acumen but when it comes to ethics, value and principles they are
big zero.

You name it and Reliance had been all through it –
from stock market rigging, undercutting, under invoicing, non payment of duties,
cheating share holders, havala, harshad Mehta, bofors and framing of Nusli
Wadia, they are involved in every damn scam. Though Reliance gathered lot of
International attention due to increasing profits and revenue, it could not
avoid getting into controversies too due to n number of cases running against
it. I feel ashamed on discovering that some of the political leaders whom I
thought to be man of ethics where puppets in the hands of Dhirubhai. For those
who tried to raise their voice against Reliance like Nusli Wadia, The Indian
Express and a chosen few political leaders had a bad fate as with the ascent of
time, Dhirubhai became bigger than the government and if the political party
tried to take any step against him, he threatened to pull down the
government.

The author says that the Indian political system
was driven by the prices of polyester and he has made a right remark as Indian
corporate war between the Wadias and Ambanis started with polyester and later on
spread among political parties with one supporting the Ambanis and very few who
were the real preachers of values and principals supporting the Wadias. But the
influence of Dhirubhai on New
Delhi was so strong that everything worked the way he
wanted it to whether it was getting a license or getting action against his
business competitors and creating troubles for him like it was done for Nusli
Wadia. Dhirubhai manipulated the laws and customs rules in the way he wanted
them to be and by the time government realized the loopholes in the rules, he
had already made his buck. He exploited the Indian government, their rules and
tax system to the best of his ability which is very clear from the fact that
Reliance is the only company which never paid taxes even after three decades of
listing and went on giving bonus and dividends to shareholders. It took too long
for the government to react and it was only for Reliance that Minimum Alternate
Tax was brought in action. There had been a sheer injustice against the
competitors of Reliance as all of them were not allowed to flourish in a similar
environment but at the end of the day what matters is the return on investment.
This is where Reliance had been right there by declaring dividends and bonus to
stake holders. So it would be right to say, it was government and the system
which was at loss. Billions of rupees which should have gone to the coffer of
government went into building Reliance Empire and also went for paying bribes to
the government babus.

Rich, powerful, intelligent, shrewd but a
man sans ethics and values – this is how the author has described Dhirubhai
Amabni in his book.I hope by know all of
you must be aware of the reason for the book being banned in India.
Someone who smuggled entire factory into India, who purchased the government can easily
get the book and the author banned in India if he dares to raise voice
against him. I really appreciate this work of Hamish McDonald
who went against the stream to expose Dhirubhai and his group to the public. It
is an interesting and must read for those who are interested in India Inc but
the only option left to them is to smuggle the book into India from some foreign location as Dhirubhai
smuggled the entire factory set up at Patalganga because the book is banned in
India.

Extract from the
book

'Today the fact is that Ambani is bigger than
government,' said the lawyer in all seriousness. 'He can make or break prime
ministers. In the United
States you can build up a super corporation but
the political system is still bigger than you. In India the system
is weak. If the stock exchange dares to expose Ambani, he tells it: I will pull
my company shares out and make you collapse. I am bigger than your exchange. If
the newspapers criticize, he can point out they are dependent on his advertising
and he has his journalists in every one of their departments. If the political
parties take a stand against him, he has his men in every party who can pull
down or embarrass the leaders. He is a threat to the system. Today he is
undefeatable.'

But two of India's sharpest business journalists
did get Dhirubhai to admit that stroking government was his biggest task. 'The
most important external environment is the Government of India,' he told India Today's T
N. Ninan and Jagannath Dubashi. 'You have to sell your ideas to the government.
Selling the idea is the most important thing, and for that I'd meet anybody in
the government. I am willing to salaam anyone. One thing you won't find in me
and that is ego.'

5-Jul Summary

FII Net Bought 372 Cr & DII Bought 97 Cr.

Pandit to axe 18k jobs at Citi

Pandit to axe 18k jobs at Citi

Does 'Re-Engineering' Of Business To Scale Down Empire After Subprime Crisis

Iain Dey

Shortly
after 2 am last Monday morning, Citigroup bankers began to hear their
Blackberry's chirp. Vikram Pandit, the bank's recently installed chief
executive, had just sent an e-mail to every employee in the company.
Headed "Our culture", the memo praised the "remarkable efforts" from
staff and the 200 years of history that ensured Citi would continue to
be the "backbone of world commerce". Citi would become "the greatest
turnaround story of our age," Pandit promised. "We can make this the
best company in the world, bar none."

Within hours, the message had
made its way onto the internet. No sooner was it posted than bloggers
on both sides of the Atlantic had branded Pandit "delusional". Many of
the critics claimed to be part of Citi's 350,000-strong global
workforce.

Pandit certainly has his work
cut out selling his message. Over the next few days, he will begin
signing off second-quarter results that are expected to reveal further
write-downs of at least $8 billion (pounds 4 billion). That would be in
addition to the $40 billion of write-downs the bank has already
announced since the sub-prime crisis erupted last summer.

Crisis looms as global gas supplies dry up

India faces a new energy crisis - unavailability of gas in the
international market - that could worsen power supplies and impact a
wide range of industries.

Indian companies have been importing liquefied natural gas because
domestic demand exceeds supply. A third of these imports are secured in
the spot market and the balance through multi-year term contracts.

This sourcing pattern is a problem because, as Prosad Dasgupta, managing director of Petronet LNG [Get Quote], India's largest importer of LNG, explained, "There is a huge shortage of spot LNG cargoes in the world market."

This is because most of the cargoes have been bought by Japan, which
is using gas to fire its power plants after its Kashiwazaki nuclear
power plant closed last year.

Japan has imported close to 9 million tonnes per annum of spot LNG
over the last year - more than India's LNG re-gassification capacity of
7.5 mtpa owned by Petronet LNG and Shell Hazira.

Spot LNG prices have increased - they mimic oil prices - but the
supply constraint is a first. Prices at the New York Merchantile
Exchange have more than doubled to 13.50 per mBtu (million British
thermal unit) from $5.89 per mBtu in August 2007.

Users of spot LNG include NTPC - the country's largest power
generator. "Spot LNG purchases are becoming a problem. When they are
available we are paying $22-25 per mBtu. Our plants are also facing a
shortage of gas," said an NTPC spokesperson.

"Shortage of spot LNG also affects smaller industries such as tile-
and glass-makers and small power plants," said a Delhi-based analyst.
"The larger players tend to have term contracts," he added.

Gas producing countries liquefy gas and transport it in cryogenic
ships to consuming countries that are not connected by pipelines. The
liquefied gas is easier to transport but is more expensive since the
buyer has to pay liquefaction and regassification costs.

Most industries in Gujarat, where India's LNG regassification terminals are located, are worried.

"We may have to increase retail prices of gas in Gujarat," said an
official in Gujarat State Petroleum Corporation, which sells gas to
households and vehicles.

Industries across the country are waiting for Reliance Industries [Get Quote]
to start producing gas from the Krishna-Godavari basin off the Andhra
Pradesh coast. At peak production, gas from this field is expected to
double availability in India.

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7-July News

7-July-08 News

Headlines for the day

Corporate News Headline
L&T decided to split its Engineering Construction and Contracts Division to increase efficiency in managing growth. (ET)
Ranbaxy
completed successfully the phase II clinical trials for the first
malaria drugs being developed in India since many decades and expects
to start marketing it in next 3-5 years. (BS)
Gitanjali
Gems is planning to buy the US-based jewellery retail chain, Whitehall
Jewellers Holdings with an investment of Rs. 3.5-4 bn. (ET)

Economic and Political Headline
The
WPI based inflation surged to a fresh high of 11.63% for the week ended
June 21, 2008, on the back of increasing food and commodity prices. (BS)
The
RBI said that the flow of credit from scheduled commercial banks went
up 25.4% to Rs. 24745.96 bn between April and June 20 this year. (BS)
The
UK car sales fell 6.1% in June as Britons curtailed spending amid
spiralling fuel prices and a slowing economy. (Bloomberg)