Wednesday, January 6, 2010
The need for planned cities
The need for planned cities – is the current size of cities justifiable in terms of greater efficiencies in production of goods, services and amenities offered to their residents? R Sridhar examines the issue
The Economic Times, January 6, 2010, Page 3 
The Economic Times, January 6, 2010, Page 3
Godrej Properties has a dream debut
Godrej Properties has a dream debut
Economic Times, January 6, 2010, Page 16
Stock Surges 9% To Close At Rs 535 On BSE; 20% Of Equity Traded On The First Day
Our Bureau MUMBAI
THE new year has begun on a positive note for new listings. After JSW Energy, yet another public issue — Godrej Properties — made its debut on bourses at a premium to the offer price on the back of good investor participation in trading of the shares.
This is unlike the response to some of the high-profile initial public offerings (IPO) last year that attracted huge subscription but failed to deliver positive returns on listing and subsequently. Godrej Properties shares saw heavy trading during initial trading hours, which lifted the share price to an intra-day high of 586.7. As the day progressed, the stock lost some ground to touch the day’s low of Rs 500 before ending with a gain of 9% at Rs 535 on BSE on Tuesday. The gains were supported by huge volumes as a total of 1.4 crore shares, or 20% of the company’s equity, changed hands both on BSE and NSE.
Analysts have positive views about the long-term prospects of Godrej Properties. The company could be a good long-term bet, because of its trustworthy management and the group’s credential to deliver quality products, they feel.
“The company is into affordable housing, for which there is a lot of demand. The segment still has enough potential for accommodating more and more large players,” said Mayank Shah, CEO, Anagram Capital. The business model of Godrej Properties is different from other players, as the company outsources a lot of work which helps it realise quick gains, he added.
Priced at Rs 490 a share, Godrej Properties IPO was subscribed four times on overall basis, although the retail portion was under-subscribed. The company plans to use the proceeds for new projects, debt repayment and for joint development projects.
The near-term outlook for the real estate sector, according to analysts, does not look as promising as in the past, as most of the positives have already been factored into prices, they feel. The sector is sensitive to changes in interest rates. So, any rise in rates won’t augur well for the sector. It would affect demand, putting pressure on prices and profit margins, feel analysts.
Economic Times, January 6, 2010, Page 16
Stock Surges 9% To Close At Rs 535 On BSE; 20% Of Equity Traded On The First Day
Our Bureau MUMBAI
THE new year has begun on a positive note for new listings. After JSW Energy, yet another public issue — Godrej Properties — made its debut on bourses at a premium to the offer price on the back of good investor participation in trading of the shares.
This is unlike the response to some of the high-profile initial public offerings (IPO) last year that attracted huge subscription but failed to deliver positive returns on listing and subsequently. Godrej Properties shares saw heavy trading during initial trading hours, which lifted the share price to an intra-day high of 586.7. As the day progressed, the stock lost some ground to touch the day’s low of Rs 500 before ending with a gain of 9% at Rs 535 on BSE on Tuesday. The gains were supported by huge volumes as a total of 1.4 crore shares, or 20% of the company’s equity, changed hands both on BSE and NSE.
Analysts have positive views about the long-term prospects of Godrej Properties. The company could be a good long-term bet, because of its trustworthy management and the group’s credential to deliver quality products, they feel.
“The company is into affordable housing, for which there is a lot of demand. The segment still has enough potential for accommodating more and more large players,” said Mayank Shah, CEO, Anagram Capital. The business model of Godrej Properties is different from other players, as the company outsources a lot of work which helps it realise quick gains, he added.
Priced at Rs 490 a share, Godrej Properties IPO was subscribed four times on overall basis, although the retail portion was under-subscribed. The company plans to use the proceeds for new projects, debt repayment and for joint development projects.
The near-term outlook for the real estate sector, according to analysts, does not look as promising as in the past, as most of the positives have already been factored into prices, they feel. The sector is sensitive to changes in interest rates. So, any rise in rates won’t augur well for the sector. It would affect demand, putting pressure on prices and profit margins, feel analysts.
Godrej Properties does a star turn, lists at a premium
Godrej Properties does a star turn, lists at a premium
Hindu Business Line, January 6, 2010, Page 1
Our Bureau, Mumbai
Godrej Properties beat most of the recent IPO showings on the bourses, listing at a 4 per cent premium to its issue price and closing 9 per cent higher on Tuesday.
The scrip, whose issue price was Rs 490, listed at Rs 510 on the BSE and closed Tuesday at Rs 534.55.
Recent listings have had a subdued run, despite the hype generated ahead of their debut. Adani Power closed at its issue price of Rs 100. JSW Energy managed a gain of 0.75 per cent over its issue price, while NHPC was marginally better, logging a gain of 2 per cent over its issue price of Rs 36.
Mr Mehraboon J. Irani, Senior Vice-President (PMS), FCH Centrum Wealth Managers, said the Godrej Properties IPO was quite attractively priced and looked fairly valued with today's gain. With the economy just about looking up, property prices have seen improvement in the last six months. It is a good stock to buy with a long-term perspective, he said.
On the BSE, Godrej Properties touched a high of Rs 586.70 and a low of Rs 500 with the total traded value clocking Rs 290.11 crore. A total of 52,60,628 shares changed hands during the day. On the NSE, the stock opened at Rs 511, touched a high of Rs 586.80 and a low of Rs 502.15 before ending the day at Rs 536.05. The total value of shares traded was Rs 480.27 crore with 87,07,481 shares traded.
In December, Godrej Properties sold close to 9.43 million shares to raise Rs 469 crore. The issue was subscribed over four times. About 30 per cent of the IPO money would go towards servicing debt.
The company allotted 16,97,345 equity shares at Rs 530 per share, the top end of the issue price band, to four anchor investors — JF India Fund (8,72,365 shares), JF Eastern Smaller Companies Fund (1,80,453 shares), Ward Ferry Management (2,93,592 shares) and The Royal Bank of Scotland (3,50,935 shares) worth about Rs 90 crore.
Hindu Business Line, January 6, 2010, Page 1
Our Bureau, Mumbai
Godrej Properties beat most of the recent IPO showings on the bourses, listing at a 4 per cent premium to its issue price and closing 9 per cent higher on Tuesday.
The scrip, whose issue price was Rs 490, listed at Rs 510 on the BSE and closed Tuesday at Rs 534.55.
Recent listings have had a subdued run, despite the hype generated ahead of their debut. Adani Power closed at its issue price of Rs 100. JSW Energy managed a gain of 0.75 per cent over its issue price, while NHPC was marginally better, logging a gain of 2 per cent over its issue price of Rs 36.
Mr Mehraboon J. Irani, Senior Vice-President (PMS), FCH Centrum Wealth Managers, said the Godrej Properties IPO was quite attractively priced and looked fairly valued with today's gain. With the economy just about looking up, property prices have seen improvement in the last six months. It is a good stock to buy with a long-term perspective, he said.
On the BSE, Godrej Properties touched a high of Rs 586.70 and a low of Rs 500 with the total traded value clocking Rs 290.11 crore. A total of 52,60,628 shares changed hands during the day. On the NSE, the stock opened at Rs 511, touched a high of Rs 586.80 and a low of Rs 502.15 before ending the day at Rs 536.05. The total value of shares traded was Rs 480.27 crore with 87,07,481 shares traded.
In December, Godrej Properties sold close to 9.43 million shares to raise Rs 469 crore. The issue was subscribed over four times. About 30 per cent of the IPO money would go towards servicing debt.
The company allotted 16,97,345 equity shares at Rs 530 per share, the top end of the issue price band, to four anchor investors — JF India Fund (8,72,365 shares), JF Eastern Smaller Companies Fund (1,80,453 shares), Ward Ferry Management (2,93,592 shares) and The Royal Bank of Scotland (3,50,935 shares) worth about Rs 90 crore.
Godrej Prop lists at premium, stock ends 9 per cent up
Godrej Prop lists at premium, stock ends 9 per cent up
Hindustan Times, January 6, 2010, Page 21
Becoming the first real estate firm to list in two years, shares of Godrej Properties debuted on bourses at around 5 per cent premium over its issue price of Rs 490. The scrip gained 20 per cent to Rs 586.7 per share before ending the day over 9 per cent up at Rs 534.5 per share.
Godrej Properties has listed over 6.98 crore shares on bourses raising around Rs 462 crore from the market. The company would be using the IPO proceeds to acquire land, construction of projects and repayment of loans.
The company currently focuses on residential, commercial and township developments. “We see strong demand for affordable homes in the country. We want to tap this opportunity,” said Adi Godrej Chairman of Godrej Group.
The positive market reaction to realty stock is sure to boost morale of nearly 16 realty firms looking to enter the primary market. Having suffered hugely during slowdown, realty firms are planning to make the most of improving economy and investor sentiments by entering primary market.
Hindustan Times, January 6, 2010, Page 21
Becoming the first real estate firm to list in two years, shares of Godrej Properties debuted on bourses at around 5 per cent premium over its issue price of Rs 490. The scrip gained 20 per cent to Rs 586.7 per share before ending the day over 9 per cent up at Rs 534.5 per share.
Godrej Properties has listed over 6.98 crore shares on bourses raising around Rs 462 crore from the market. The company would be using the IPO proceeds to acquire land, construction of projects and repayment of loans.
The company currently focuses on residential, commercial and township developments. “We see strong demand for affordable homes in the country. We want to tap this opportunity,” said Adi Godrej Chairman of Godrej Group.
The positive market reaction to realty stock is sure to boost morale of nearly 16 realty firms looking to enter the primary market. Having suffered hugely during slowdown, realty firms are planning to make the most of improving economy and investor sentiments by entering primary market.
Godrej Properties surges on debut
Godrej Properties surges on debut
Business Standard, January 6, 2010, Section II, Page 1
first listing by a realty firm in two years brings cheer to the real estate sector
MUMBAI: Shares of Godrej Properties surged nearly 20 per cent after listing at a 5.05 per cent premium on its debut on Tuesday, in a first listing by any property firm in over two years. ( Watch )
The strong start would serve to cheer realty firms that had till recently been hard-pressed to raise funds for projects. At least 16 Indian developers have filed papers for public offers since September, looking to raise a total of about $6 billion.
Godrej Properties, a unit of Godrej Industries, had raised about $100 million through its initial public offering of 9.4 million shares, which was subscribed four times. The firm had fixed its issue price at the lower end of Rs 490-530 range.
The share touched a high of Rs 586.70 during the day, after having opened at Rs 514.75.
"They got an advantage of Godrej brand name and also Mumbai market, which is one of the better-placed markets in the country in the property sector," said Jigar Shah, senior vice president, Kim Eng Securities, adding it was supported by markets trading at 20-month highs.
The firm's debut followed a series of weak starts, mainly by power firms such as Adani Power and NHPC. On Monday another power firm, JSW Energy, closed at a small premium on its market debut.
However, Shah said, the stock is "expensive" at these levels, with 58 times its price-earning ratio for FY10 and four times its book value.
Property developers have once again queued up to raise funds through public offers as key markets such as Mumbai and Delhi have seen a return of demand for homes in the last few months, and a massive stockmarket rally since March has boosted share-sale plans of cash-strapped Indian real estate firms.
Godrej Properties plans to use the proceeds from the initial public offer for new projects, debt repayment and for joint development of projects.
About Rs 2.03 billion will be used for land acquisition, Rs 750 million for construction and Rs 1.72 billion to cut debt.
The firm hopes to benefit from a demand-push in the cost-effective housing segment in the country.
"We feel that affordable housing will take off strongly as a business in India and we are very committed to a strong play in affordable housing in Godrej Properties," Adi Godrej, chairman, Godrej group, said.
Business Standard, January 6, 2010, Section II, Page 1
first listing by a realty firm in two years brings cheer to the real estate sector
MUMBAI: Shares of Godrej Properties surged nearly 20 per cent after listing at a 5.05 per cent premium on its debut on Tuesday, in a first listing by any property firm in over two years. ( Watch )
The strong start would serve to cheer realty firms that had till recently been hard-pressed to raise funds for projects. At least 16 Indian developers have filed papers for public offers since September, looking to raise a total of about $6 billion.
Godrej Properties, a unit of Godrej Industries, had raised about $100 million through its initial public offering of 9.4 million shares, which was subscribed four times. The firm had fixed its issue price at the lower end of Rs 490-530 range.
The share touched a high of Rs 586.70 during the day, after having opened at Rs 514.75.
"They got an advantage of Godrej brand name and also Mumbai market, which is one of the better-placed markets in the country in the property sector," said Jigar Shah, senior vice president, Kim Eng Securities, adding it was supported by markets trading at 20-month highs.
The firm's debut followed a series of weak starts, mainly by power firms such as Adani Power and NHPC. On Monday another power firm, JSW Energy, closed at a small premium on its market debut.
However, Shah said, the stock is "expensive" at these levels, with 58 times its price-earning ratio for FY10 and four times its book value.
Property developers have once again queued up to raise funds through public offers as key markets such as Mumbai and Delhi have seen a return of demand for homes in the last few months, and a massive stockmarket rally since March has boosted share-sale plans of cash-strapped Indian real estate firms.
Godrej Properties plans to use the proceeds from the initial public offer for new projects, debt repayment and for joint development of projects.
About Rs 2.03 billion will be used for land acquisition, Rs 750 million for construction and Rs 1.72 billion to cut debt.
The firm hopes to benefit from a demand-push in the cost-effective housing segment in the country.
"We feel that affordable housing will take off strongly as a business in India and we are very committed to a strong play in affordable housing in Godrej Properties," Adi Godrej, chairman, Godrej group, said.
India Inc seeks stimulus at least for six months
India Inc seeks stimulus at least for six months
Economic Times, January 6, 2010, Page 17
Our Bureau NEW DELHI
CAPTAINS of Indian industry, who met the finance minister Pranab Mukherjee on Tuesday as part of pre-budget drill, sought continuation of stimulus packages for at least next six months, implementation of goods & services tax (GST) as planned besides checking the fiscal deficit, to help India post a robust economic growth in the coming fiscal.
The industrialists, who were present at the meeting in the Capital, said the finance minister was receptive to suggestions and assured that the government will take suitable measures to boost economic growth. Last year the government came out with three fiscal stimulus packages to provide a boost to domestic production and pull the economy from the downturn.
The meeting that lasted for more than two hours was attended by the presidents of industry associations CII, Ficci and Assocham besides industrialists like Mahindra & Mahindra chairman Anand Mahindra, Videocon Group chairman Venugopal Dhoot, Raymond chief Gautam Singhania, Tulsi Tanti of Suzlon and Nasscom president Som Mittal among others.
During the meeting, industry associations pointed their fears that GST may not be implemented on its scheduled date of April 1, 2010. “GST is going to be the biggest reform ever seen in fiscal and financial regime,” said CII president Venu Srinivasan. He said that even if there are flaws in GST, it should be implemented at the earliest and the government should take corrective measures on the way.
Moreover, India Inc jointly sought for continuation of stimulus packages that have helped the companies fight slowdown so far. “The stimulus should continue for another six months at least considering that economic recovery was fragile last year,” said Assocham president Swati Piramal.
Adds Ficci president Harshpati Singhania, “Customs duty should be maintained at the current level to help export led industries as the global recovery is still slow.”
Corporate India also asked the government to expedite the divestment process, cut corporate tax besides extending incentives to exporters and small and medium enterprises (SMEs), to fuel India’s economic growth.
India Inc feels that while the green shoots of recovery were seen sprouting in India faster than in most parts of the world, it is essential to remain cautious to ensure India attains 9% growth.
“The FM was hopeful that India’s economic growth will reach 8% in the current quarter and further increase to 9% in the coming financial year,” Mr Dhoot said.
Economic Times, January 6, 2010, Page 17
Our Bureau NEW DELHI
CAPTAINS of Indian industry, who met the finance minister Pranab Mukherjee on Tuesday as part of pre-budget drill, sought continuation of stimulus packages for at least next six months, implementation of goods & services tax (GST) as planned besides checking the fiscal deficit, to help India post a robust economic growth in the coming fiscal.
The industrialists, who were present at the meeting in the Capital, said the finance minister was receptive to suggestions and assured that the government will take suitable measures to boost economic growth. Last year the government came out with three fiscal stimulus packages to provide a boost to domestic production and pull the economy from the downturn.
The meeting that lasted for more than two hours was attended by the presidents of industry associations CII, Ficci and Assocham besides industrialists like Mahindra & Mahindra chairman Anand Mahindra, Videocon Group chairman Venugopal Dhoot, Raymond chief Gautam Singhania, Tulsi Tanti of Suzlon and Nasscom president Som Mittal among others.
During the meeting, industry associations pointed their fears that GST may not be implemented on its scheduled date of April 1, 2010. “GST is going to be the biggest reform ever seen in fiscal and financial regime,” said CII president Venu Srinivasan. He said that even if there are flaws in GST, it should be implemented at the earliest and the government should take corrective measures on the way.
Moreover, India Inc jointly sought for continuation of stimulus packages that have helped the companies fight slowdown so far. “The stimulus should continue for another six months at least considering that economic recovery was fragile last year,” said Assocham president Swati Piramal.
Adds Ficci president Harshpati Singhania, “Customs duty should be maintained at the current level to help export led industries as the global recovery is still slow.”
Corporate India also asked the government to expedite the divestment process, cut corporate tax besides extending incentives to exporters and small and medium enterprises (SMEs), to fuel India’s economic growth.
India Inc feels that while the green shoots of recovery were seen sprouting in India faster than in most parts of the world, it is essential to remain cautious to ensure India attains 9% growth.
“The FM was hopeful that India’s economic growth will reach 8% in the current quarter and further increase to 9% in the coming financial year,” Mr Dhoot said.
India Inc makes strong pitch for continuance of stimulus package
India Inc makes strong pitch for continuance of stimulus package
Hindu Business Line, January 6, 2010, Page 18
Economic recovery still ‘fragile'; time not ripe for monetary tightening.
Our Bureau, New Delhi
Corporate India has made a fervent plea to the Union Finance Minister, Mr Pranab Mukherjee, to continue with the existing fiscal stimulus at least till September as the economic recovery was still ‘fragile' and that a low base effect was exaggerating growth in some sectors.
The unanimous and collective pressure from captains of industry could tilt the scale in favour of retention of the fiscal stimulus beyond April even as policymakers had earlier dropped strong hints that the exit could begin in the upcoming Budget through reversal of indirect tax cuts.
“We have all together requested the Finance Minister to continue with the fiscal stimulus package as the economic recovery is still fragile,” Ms Swati Piramal, Assocham President, told reporters at North Block after pre-Budget meeting of industrialists with Mr Mukherjee and senior Finance Ministry officials.
At the meeting, India Inc also stressed that time was not ripe for monetary tightening and submitted that food inflation was more on account of supply side constraints.
On the fiscal stimulus issue, the Confederation of Indian Industry (CII) President, Mr Venu Srinivasan, said that the Government could consider withdrawal at the time of introduction of the proposed goods and services tax (GST).
“We are still seeing low base effect exaggerate growth. Of course, there is real growth. But we would like the finance minister to wait and see how it goes and withdraw the fiscal stimulus in calibrated manner. We want GST to be introduced as early as possible,” Mr Srinivasan said.
The Federation of Indian Chambers of Commerce and Industry (FICCI) President, Mr Harsh Pati Singhania, said that investments are yet to pick up although there are signs of economic recovery.
“Our suggestion was stimulus should be continued at least for the first two quarters of the next fiscal,” Mr Singhania said.
FICCI has also urged the Finance Minister to maintain the peak customs duty at the current level of 10 per cent.
Asked about export sector, Mr Singhania told Business Line that the chamber has made a case for reintroduction of tax exemption on export profits (Sec 80HHC benefits).
Besides raising issues such as the cascading effect of dividend distribution tax, India Inc has also urged the Finance Minister not to go ahead with the proposed levy of minimum alternate tax (MAT) on gross asset basis under the new Direct Taxes Code.
Industrialists who attended the meeting include Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra & Mahindra; Mr Ashwin Dani, Vice-Chairman and Managing Director, Asian Paints Ltd; Mr Gautam Singhania, Chairman and Managing Director of Raymond; Mr Venugopal Dhoot, Chairman, Videocon Group, and Mr Tulsi Tanti, Chairman and Managing Director, Suzlon Energy.
Hindu Business Line, January 6, 2010, Page 18
Economic recovery still ‘fragile'; time not ripe for monetary tightening.
Our Bureau, New Delhi
Corporate India has made a fervent plea to the Union Finance Minister, Mr Pranab Mukherjee, to continue with the existing fiscal stimulus at least till September as the economic recovery was still ‘fragile' and that a low base effect was exaggerating growth in some sectors.
The unanimous and collective pressure from captains of industry could tilt the scale in favour of retention of the fiscal stimulus beyond April even as policymakers had earlier dropped strong hints that the exit could begin in the upcoming Budget through reversal of indirect tax cuts.
“We have all together requested the Finance Minister to continue with the fiscal stimulus package as the economic recovery is still fragile,” Ms Swati Piramal, Assocham President, told reporters at North Block after pre-Budget meeting of industrialists with Mr Mukherjee and senior Finance Ministry officials.
At the meeting, India Inc also stressed that time was not ripe for monetary tightening and submitted that food inflation was more on account of supply side constraints.
On the fiscal stimulus issue, the Confederation of Indian Industry (CII) President, Mr Venu Srinivasan, said that the Government could consider withdrawal at the time of introduction of the proposed goods and services tax (GST).
“We are still seeing low base effect exaggerate growth. Of course, there is real growth. But we would like the finance minister to wait and see how it goes and withdraw the fiscal stimulus in calibrated manner. We want GST to be introduced as early as possible,” Mr Srinivasan said.
The Federation of Indian Chambers of Commerce and Industry (FICCI) President, Mr Harsh Pati Singhania, said that investments are yet to pick up although there are signs of economic recovery.
“Our suggestion was stimulus should be continued at least for the first two quarters of the next fiscal,” Mr Singhania said.
FICCI has also urged the Finance Minister to maintain the peak customs duty at the current level of 10 per cent.
Asked about export sector, Mr Singhania told Business Line that the chamber has made a case for reintroduction of tax exemption on export profits (Sec 80HHC benefits).
Besides raising issues such as the cascading effect of dividend distribution tax, India Inc has also urged the Finance Minister not to go ahead with the proposed levy of minimum alternate tax (MAT) on gross asset basis under the new Direct Taxes Code.
Industrialists who attended the meeting include Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra & Mahindra; Mr Ashwin Dani, Vice-Chairman and Managing Director, Asian Paints Ltd; Mr Gautam Singhania, Chairman and Managing Director of Raymond; Mr Venugopal Dhoot, Chairman, Videocon Group, and Mr Tulsi Tanti, Chairman and Managing Director, Suzlon Energy.
Stimulus should stay: India Inc
Stimulus should stay: India Inc
Times of India, January 6, 2010, Page 27
TNN, NEW DELHI
Top corporates and representatives of all the major industry associations, including Ficci, CII and Assocham, have urged finance minister Pranab Mukherjee that the stimulus package should continue for at least six more months, now that there are clear signs of economic recovery.
The FM's pre-budget meeting with corporate honchos — including Ficci president Harshpati Singhania, Videocon's VN Dhoot, M&M's Anand Mahindra, Tulsi Tanti of Suzlon, Ashwin Dani of Asian Paints and Swati Piramal of Assocham — on Tuesday unanimously held that tax sops announced by the government last year should continue for the time being.
After the meeting, Singhania told reporters that the industry urged the FM to bring down the Minimum Alternate Tax (MAT) from 15% to 10% as the effective rate for a MAT paying company and a regular tax paying company is about the same because of lower deduction for depreciation on book profits etc. MAT is no longer the minimum alternate tax, he said, adding that when a company is amalgamated or demerged, credit benefit of MAT should be available to the amalgamated company.
"The stimulus package should not be suddenly withdrawn but should be gradually phased out as the industry is just coming out of the recession and inflation rate has already increased significantly during December 2009," a statement from Assocham said.
The industry leaders also impressed upon the Pranab Mukherjee to empower the middle class by giving them more tax sops on personal income tax. It was suggested that the tax rate of 30.9%, inclusive of 3% education cess, on income of Rs 5 lakh and above be reduced to 30%.
All corporates were in favour of introducing indirect tax reforms through Goods and Services Tax.
Times of India, January 6, 2010, Page 27
TNN, NEW DELHI
Top corporates and representatives of all the major industry associations, including Ficci, CII and Assocham, have urged finance minister Pranab Mukherjee that the stimulus package should continue for at least six more months, now that there are clear signs of economic recovery.
The FM's pre-budget meeting with corporate honchos — including Ficci president Harshpati Singhania, Videocon's VN Dhoot, M&M's Anand Mahindra, Tulsi Tanti of Suzlon, Ashwin Dani of Asian Paints and Swati Piramal of Assocham — on Tuesday unanimously held that tax sops announced by the government last year should continue for the time being.
After the meeting, Singhania told reporters that the industry urged the FM to bring down the Minimum Alternate Tax (MAT) from 15% to 10% as the effective rate for a MAT paying company and a regular tax paying company is about the same because of lower deduction for depreciation on book profits etc. MAT is no longer the minimum alternate tax, he said, adding that when a company is amalgamated or demerged, credit benefit of MAT should be available to the amalgamated company.
"The stimulus package should not be suddenly withdrawn but should be gradually phased out as the industry is just coming out of the recession and inflation rate has already increased significantly during December 2009," a statement from Assocham said.
The industry leaders also impressed upon the Pranab Mukherjee to empower the middle class by giving them more tax sops on personal income tax. It was suggested that the tax rate of 30.9%, inclusive of 3% education cess, on income of Rs 5 lakh and above be reduced to 30%.
All corporates were in favour of introducing indirect tax reforms through Goods and Services Tax.
Don’t roll back stimulus, please: India Inc to FM
Don’t roll back stimulus, please: India Inc to FM
Hindustan Times, January 6, 2010, Page 21
Amid green shoots of economic recovery, business leaders on Tuesday urged Finance Minister Pranab Mukherjee to continue with the stimulus package pushed by the government last year to counter the effects of a downturn.
The minister, who met representatives of industry chambers including Confederation on Indian Industry, Ficci and Assocham, kickstarted the customary pre-budget meetings in the backdrop of an industrial revival coupled with anxieties over the prospects of tax hikes by a government trying to curb its deficit.
Some pushed for disinvestments to check the deficit, rather than measures that could hurt them.
The GDP growth rate for the second quarter of the current fiscal stood at 7.9 per cent, exceeding expectations. The government, in its mid year review, has projected a growth rate of 7.75 per cent for 2009-10.
Harshpati Singhania, president, Ficci said a tightening of the monetary policy to contain food price inflation could hinder growth while adversely impacting the industrial sector.
“We feel that fiscal sops must continue at this point. The GDP numbers (of 7.9 per cent for the second quarter) are driven by the stimulus packages,” Singhania said, adding that the possibility of exit should be reviewed only after September.
Assocham said a continuation of the stimulus package in 2010-11 would be critical for growth and recovery after which it could be phased out gradually. Swati Piramal, president, Assocham said that fiscal deficit can be partly contained through an expeditious disinvestment process.
The industry bodies also urged the minister to roll back the minimum alternate tax (MAT) to 10 per cent from 15 per cent. At present, companies pay 15 per cent MAT on book profits. The government hiked MAT from 10 per cent to 15 per cent in the last budget.
Ficci has also stressed the need to incentivise investments.
Hindustan Times, January 6, 2010, Page 21
Amid green shoots of economic recovery, business leaders on Tuesday urged Finance Minister Pranab Mukherjee to continue with the stimulus package pushed by the government last year to counter the effects of a downturn.
The minister, who met representatives of industry chambers including Confederation on Indian Industry, Ficci and Assocham, kickstarted the customary pre-budget meetings in the backdrop of an industrial revival coupled with anxieties over the prospects of tax hikes by a government trying to curb its deficit.
Some pushed for disinvestments to check the deficit, rather than measures that could hurt them.
The GDP growth rate for the second quarter of the current fiscal stood at 7.9 per cent, exceeding expectations. The government, in its mid year review, has projected a growth rate of 7.75 per cent for 2009-10.
Harshpati Singhania, president, Ficci said a tightening of the monetary policy to contain food price inflation could hinder growth while adversely impacting the industrial sector.
“We feel that fiscal sops must continue at this point. The GDP numbers (of 7.9 per cent for the second quarter) are driven by the stimulus packages,” Singhania said, adding that the possibility of exit should be reviewed only after September.
Assocham said a continuation of the stimulus package in 2010-11 would be critical for growth and recovery after which it could be phased out gradually. Swati Piramal, president, Assocham said that fiscal deficit can be partly contained through an expeditious disinvestment process.
The industry bodies also urged the minister to roll back the minimum alternate tax (MAT) to 10 per cent from 15 per cent. At present, companies pay 15 per cent MAT on book profits. The government hiked MAT from 10 per cent to 15 per cent in the last budget.
Ficci has also stressed the need to incentivise investments.
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