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Stress management

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77 Stress management

A stressor is a
situation, thought or stimulus that triggers your stress response. We all need a
little stress in our lives. Good stress makes us feel alert and stimulated. But
chronic, acute stress can cause anxiety, depression and disease. Different
people may respond differently to the same stressor. It’s important to identify
what stressors cause you distress. The more you learn about your stressors, the
more likely you are to diminish, control or eliminate them.

When you’re
stressed, you lose sleep. When you lose sleep, you feel more stressed. Sleep
deprivation doesn’t just make you tired. It interferes with the natural pattern
of stress hormone production . . . . Exercise protects the body against the
effects of physical and psychological stress. But there are some caveats. First,
to reap anti-stress benefits, exercise should be aerobic. Weight training has
important health benefits, but it’s not a great stressbuster. Second, you will
get more benefits if you exercise in bouts of at least 30 minutes. This is how
long it takes for the brain to produce endorphins — those natural opiates that
give you the ‘jogger’s high’.

Third, you might
not benefit if you don’t want to exercise. When animals are forced to exercise,
they become more — not less — stressed. Take a deep breath. This is one of the
oldest stress management tips around. Take a deep breath and exhale — slowly.
When you inhale, you speed up your sympathetic nervous system. When you exhale,
you slow it down — a minitress reducer.

(Source : The Economic Times, dated 31-7-2010)

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Gururaj Deshpande to co-chair Obama’s Advisory Council

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76 Gururaj Deshpande
to co-chair Obama’s Advisory Council

India-born Gururaj
Deshpande, chairman of Tejas Networks, A123 and Akshaya Patra, has been
appointed co-chairman of US President Barack Obama’s National Advisory Council
on Innovation and Entrepreneurship. He will support Obama’s
innovation strategy by helping develop policies that foster entrepreneurship,
create jobs and drive economic growth.

Popularly known as
‘Desh’, Deshpande is one of the 26 members of the council which includes serial
entrepreneurs, university presidents, investors and non-profit leaders. Steve
Case and Mary Sue Coleman will serve as the other co-chairs.

(Source : Business Standard, dated 23-7-2010)

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kcr for Commonwealth Games a waste, should’ve gone to poor kids.

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75 ‘35kcr for
Commonwealth Games a waste, should’ve gone to poor kids.

A verbal spat was
initiated by Congress leader Mani Shankar Aiyar when he was asked to comment on
the rainy morning by some media persons outside Parliament House. “I am
delighted in a way because rains are causing difficulties for the Commonwealth
Games. Basically, I will be very unhappy if the games are successful, because
then they will start bringing Asian Games, Olympic Games and all those,” the
former sports minister replied.

Explaining his
opposition to the Games, Mr. Aiyar said a whopping Rs.35,000 crore were being
spent on the sporting event, when it should have been spent on children who did
not have the basic facilities to play. “Those who are patronising the Games can
only be evil. They cannot be God. Thousands of crores are being spent on
circuses like these while the common children are being deprived of basic
facilities to play,” Mr. Aiyar said, adding that all ‘expectations’ from the
Games had been belied.

Mr. Aiyar also
alleged that India had bribed other Commonwealth nations for the Games. “To take
the Games, the Olympic association of every Commonwealth country was given $ 1
lakh . . . . it was given to Australia, New Zealand, Canada, and Britain. Those
countries did not need this money,” he said adding that “I would call it a
bribe.”

(Source : The Economic Times, dated 28-7-2010)

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Desi lawyers teach English to US attorneys

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74 Desi lawyers teach
English to US attorneys

Many top US law
firms are hiring Indian lawyers to edit and make grammatical and syntax
corrections in legal drafts/contracts prepared by their lawyers. A Fortune 100
client of a US law firm, Smith Dehn LLP, has specifically requested that legal
research, analysis, writing, editing exercises that cost millions of dollars in
the US be done by Indian attorneys.

A recent American
bar council journal article compared the scenario to a man bites dog story. It
says highly-trained LPO (legal process outsourcing) attorneys in India have been
assigned the task of correcting grammatical and other mistakes of partners and
associates at some of the top 100 law firms in the US. It further said,
high-quality and effective English writing has been out of fashion in the US for
several decades.

Till some time
ago, Indian lawyers were seen to use lofty English British-style pomposity, a
vestige of colonial rule. Their sentences were long and
winding. There were too many usages of passive and indirect speech. Today, they
are good with plain, crispy, clear and clean English writing. In fact, LPO has
made them think global and grow global. American lawyers are liking it, a
high-quality second look at the draft, said Russell.

(Source : The Times of India, dated 26-7-2010)

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Double standards Case :

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72 Double standards
Case :

US :
Asbestos-related suits

India : Bhopal Gas
tragedy

 

Damage :
US : 700,000 people affected

India : 20,000
dead, 570,000 injured with possible generational impacts

 

Caused by :
US : Asbestos fibres

India : Methyl
Isocyante gas released from the factory

Liability :
US : Carbide and Amchem cases being fought by Dow

India : Dow
refuses to take liability of Carbide

 

Payments :
US : $ 487mn litigation costs, $ 1.5bn resolution costs & $ 839mn estimated
future liability

India : $ 470mn
paid by Carbide in 1989. Refuses any further payment.

 

(Source : The Times of India, 3-7-2010)

 

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Online evaluation sparks revolution

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73 Online evaluation
sparks revolution

Engineering
students pursuing their PhDs needn’t fret over errors in their results anymore.
The Visvesvaraya Technological University (VTU) has introduced online evaluation
of answerscripts for its PhD students from 2010-11.

On a pilot basis,
VTU has already scanned the 750 PhD answerscripts. If all goes well, it’ll be
extended to MTech and MBA courses, too.

Manual evaluation
leaves multiple scope for errors. In case of multiple solutions, the evaluator
will have the freedom to decide. The process take only a few minutes and the
scripts get stored in the system. A software developed exclusively for digital
evaluation helps the evaluator open the answer booklet with just a mouse-click.
Next, the screen displays a series of register numbers. The evaluator can have
his pick. The question for the particular answer is displayed on the screen,
along with the scheme of evaluation. This also allows two evaluators to check
the same answerscript simultaneously. The final evaluator draws an average. In
case of a difference of 15 marks or more, the third evaluator reassesses the
script.

(Source : The Times of India, dated 15-8-2010)

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IFAC president warns against auditor rotation

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71 IFAC president
warns against auditor rotation

Mandatory auditor
rotation makes no sense, according to International Federation of Accountants
president Robert Bunting.

“While firm
rotation might seem to remove any bias that may be attached to past decisions,
it makes no sense at all,” Bunting said.

“In most parts of
the world there are not enough choices to allow for this without forcing
companies to choose audit firms that have no expertise in their industry.”

Bunting said a
number of countries have experimented with mandatory rotation before abandoning
it as almost impossible to implement. Yet, it is still being considered as a
remedy to the Satyam scandal in India.

It would not be a
pragmatic solution and would set the country apart from nearly all of its
trading partners, Bunting said.

(Source : www.ifac.org)

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10% and 30% of the amount recovered to Whistle blowers – USA – SEC

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70 10% and 30% of the
amount recovered to Whistle blowers – USA – SEC


In what could give new meaning to the phrase — “If you see something, say
something” — a clause within the financial reform legislation is offering big
cash rewards to whistleblowers who report fraud and other wrongdoing at
U.S.-listed companies and Wall Street banks.

Under the program,
which is already live, anyone who provides a tip that leads to a successful
Securities and Exchange Commission action will be able to collect between 10%
and 30% of the amount recovered — as long as the total amount exceeds $1
million. This means the minimum payout is $ 100,000. The whistle blower could be
a company insider or a private investor, if they’re able to offer information or
analysis that leads to an action. And with potential payoffs netting millions —
or even tens of millions — of dollars, experts are bracing for a surge in
tipoffs.

The program also
protects squealers against company retaliation. Any whistleblower who is fired,
demoted, suspended, threatened, harassed or discriminated against by a company
for providing info or testifying in an SEC investigation, can file an action in
the U.S. District Court. If they succeed in proving their case, the legislation
guarantees the person’s reinstatement, two times the amount of backpay owed, and
coverage of all court and attorney fees — so long as the action is filed within
a certain time period.

Even a mid-cap
company could wind up with a consent order or suit in the millions of dollars,
says Daniel Karson, executive managing director and counsel at Kroll, a risk
consulting company. “So 10% for making a phone call is a pretty good payday,” he
says.

(Source : TIME.COM, 19-8-2010)

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Vodafone deal : Tax burden draws flak

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  1. Vodafone deal : Tax burden draws flak

The
Government’s attempt to change its tax laws in order to slap a $ 2 billion tax
bill on Vodafone for its roughly $ 11.1 billion purchase of Hutch Essar in
2007, is meeting with stiff resistance from powerful US investors. Claiming
that the move has killed investment appetite in India, US investors have
written to the Finance Minister Pranab Mukherjee, asking for a review of the
Revenue authorities decision to tax cross-border investments with
retrospective tax legislation enacted in 2008.

The strongly
worded letter, expressing concerns about India’s investment climate has also
been sent to principal secretary to PM, T. K. A. Nair, Cabinet Secretary K. M.
Chandrasekhar, Deputy Chairman, Planning Commission, Montek Singh Ahluwalia
and the Commerce Ministry. The letter has been written by the National Foreign
Trade Council (NFTC), an association of 300 US business enterprises engaged in
all aspects of international trade and investment.

According to
the NFTC, any necessary changes made to the laws should be with prospective
effect only, rather than through retrospective changes in interpretation of
current law or application of withholding tax provisions.

The NFTC
warns that the move “creates an impression among foreign investors that
investing in India brings with it a significant risk of tax liabilities
arising from unforeseen new interpretations of tax laws and retrospective tax
changes’’. ‘‘Our members will have limited funds to invest overseas and this
new interpretation may cause several of them to reconsider investing in India,
looking instead to other countries which have not taken this position and
which act in a perceived less arbitrary manner in taxing foreign investors,’’
it added.

Pointing out
that US-based MNCs have a history of robust investment in India, NFTC said ‘‘
Indian Revenue authorities have begun to argue that India is entitled to tax
certain capital gains on global M&As taking place outside of India.’’

(Source :
Internet & Media Reports, 8-8-2009)

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Right to education becomes law, puts India in select league

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  1. Right to education becomes law, puts India in
    select league


India on Tuesday joined a select global club with the passage of the Right to
Free and Compulsory Education Bill, setting in motion an ambitious, if
much-delayed, scheme of providing education to every child between 6 and 14
years.


The law is unique as, while providing compulsory education, it would not fail
any student till Class VIII. It also enjoins all Government and private
schools to provide 25% quota to ‘disadvantaged’ kids. The law provides for
building neighbourhood schools in three years whose definition and location
will be decided by states.


The legislation, which has already been passed by the Rajya Sabha, will soon
be enacted after getting the assent from President Pratibha Patil. The RTE
would empower the seven-year-old 86th Constitutional amendment that made free
and compulsory education a fundamental right. The Bill sets down guidelines
for States and the Centre to execute and enforce this right. Earlier,
education was part of the directive principles.

(Source :
The Times of India, 5-8-2009)

 

 

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India to amend tax treaty with Mauritius

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  1. India to amend tax treaty with Mauritius

India is planning amendments to the Double
Taxation Avoidance treaty with Mauritius to prevent its misuse for avoiding
taxes. “Amendments to the Indo-Mauritius DTAC (Double Taxation Avoidance
Convention) to prevent its misuse and enhance exchange of information,
including banking information, are being pursued . . .,” Minister of State for
Finance S. S. Palanimanickam said in a written reply in the Rajya Sabha.

The changes in the treaty are being worked upon
through a joint working group constituted for this purpose, he added. Many
companies route their investments into India through tax havens to avoid
paying taxes.

The Organisation for Economic Cooperation and
Development (OECD) has said that all countries should permit access to bank
information for all tax purposes, so that tax authorities could fully
discharge their revenue raising responsibilities, the Minister said.

(Source : Business Standard, 5-8-2009)

 

 

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UK amends citizenship rules

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  1. UK amends citizenship rules

The automatic right for non-EU citizens,
including Indians, to apply for a British passport after working in the UK for
five years has been ended with the introduction of ‘probationary citizenship’,
under which they must demonstrate commitment to the country through voluntary
work and integration.

There is a double benefit in the requirements to
demonstrate a commitment to Britain and a willingness to play a part in
community life. These allow the authorities to judge a person’s economic
potential and contribution to society. Crucially, migrants will be helped to
settle in, a particular challenge for people learning a new culture. Points
could also be removed for ‘bad’ behaviour.

Under the new system, applicants for citizenship
require a total of 20 points to gain probationary citizenship either through
the work route — meeting the immigration rules (10 points) and passing
knowledge of life in the UK or the English language test (10 points).

To gain full citizenship applicants must pass
knowledge of life in the UK or an English language test. Those who have failed
either test will have to retake it.

(Source : Business Standard, 5-8-2009)

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Companies routing funds to evade taxes face taxing times

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  1. Companies routing funds to evade taxes face taxing times

The Government is mulling new laws to bring into the tax
net domestic companies which deliberately route their overseas investments
through tax havens to avoid paying taxes at home.

The inclusion of new provisions in the existing tax laws,
called Controlled Foreign Corporation (CFC) laws, was also suggested by the
Kelkar Task Force on tax reforms.

India, however, is still debating on the modality of the
CFC, though the Kelkar report, submitted to the Government six years ago, had
recommended “introduction of anti-abuse provisions in the domestic law,
enacting of CFC regulations and the law relating to thin capitalisation”.

The advantage of having CFC laws is that it will not be
affected by the Double Taxation Avoidance Agreement (DTAA). Currently, the
profits of subsidiaries of Indian companies are not taxable in India, as there
are no laws to bring them under the tax net. In fact, foreign subsidiaries do
not declare their dividends to avoid being taxed in India.

(Source : Business Standard, 3-8-2009)

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Oh, for some rectitude

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  1. Oh, for some
    rectitude

 


You can’t spend more without
higher revenues. ‘Calculated risks’ is a euphemism for fiscal brinkmanship

“There has been an unsustainable increase in
Government expenditure. Budgetary subsidies, with questionable social and
economic impact, have been allowed to grow to an alarming extent. The tax
system still has many loopholes. The crisis of the fiscal system is a cause
for serious concern. The fiscal deficit of the Central Government, which
measures the difference between revenue receipts and total expenditure, is
estimated at more than 8% of GDP in 1990-91, as compared with 6% at the
beginning of the 1980s and 4% in the mid-1970s. This fiscal deficit had to be
met by borrowing. The burden of servicing this debt has now become onerous.
Interest payments alone are about 4% of GDP and constitute almost 20% of the
total expenditure of the Central Government.

Without decisive action now, the situation will
move beyond the possibility of corrective action. There is no time to lose.
Neither the Government nor the economy can live beyond its means, year after
year. The room for manoeuvre, to live on borrowed money or time, does not
exist anymore.”
— From the first budget speech of Manmohan Singh, 24 July 1991.

Today interest payments account for Rs.2,25,511
crore; defence Rs.1,41,703 crore; and subsidies Rs.1,11,276 crore. These three
alone siphon off 78% of Centre’s net revenue. None build infrastructure.
(Note : The above analysis remains valid even today. Our fiscal
situation is much worse than in 1991. Have we learnt any lessons in last 18
years ? Where are the remedial measures ?)

(Source : Businessworld Magazine, 3-8-2009)

 

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600 years on, House stops lording over law

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  1. 600 years on, House stops lording over law

More than 600 years of British history and tradition ended
when Parliament’s upper chamber, the unelected House of Lords, ceased to also
be the nation’s highest court.

The 12 ‘Law Lords’ convened in their debating chamber and
delivered the institution’s final seven judgments. The Lords of Appeal in
Ordinary, as they’re formally known, are moving to the Supreme Court of the UK
on October 1.

The House of Lords has been operating as a court since
1399. Prior to that the full Parliament could weigh cases. While the House of
Lords has kept separate judicial and legislative functions since 1876, the two
weren’t physically divided. After hundreds of years it looks ‘unusual’ for
lawmakers to be involved in judicial affairs, and the Supreme Court is a ‘nice
symbol’ of modernity.

The new court will be located in a refurbished building
overlooking Parliament Square. It will be made up of 11 of the 12 Judges that
worked in the House of Lords. Anthony Clarke will be the 12th Justice, and the
first to be appointed directly to the Supreme Court. Nicholas Phillips, now
senior law lord, will be the first President of the UK Supreme Court.

While ‘constitutionally nothing will change,’ the symbolic
importance of physically separating the Legislature and the judiciary is
significant, head of Justice, a UK human rights and law reform organisation.

(Source : The Times of India, 31-7-2009)

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Subbarao spells out RBI’s five big challenges

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  1. Subbarao spells out RBI’s five big challenges

The first challenge is managing the balance between the
short-term compulsions of providing ample liquidity to the market and the
potential for an inflationary pressure.

The second challenge is to manage “the Government’s large
borrowing programme without crowding out present or potential private credit
demand’’. Despite active liquidity management by the central bank, Government
borrowing has led to hardening of yields. The third challenge is to maintain
policy rates and liquidity conditions that could spur private investment
demand. Having a fiscal consolidation process with a concrete roadmap was also
a challenge before the RBI.

“Large fiscal deficits, if continued strictly beyond the
recovery period, can crowd out private investment and trigger inflationary
pressures”. “It is also necessary to focus on the quality of fiscal adjustment
while pursuing quantitative targets’’.

For the medium-term, the challenge was to improve the
country’s investment climate to move forward with financial sector reforms “to
promote financial inclusion, further widen and deepen financial markets and
strengthen financial institutions’’.

(Source : The Times of India, 22-7-2009)

 

 

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Foreign investment law in the works

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  1. Foreign
    investment law in the works

 

The Government is working on a proposal to
introduce a new legislation relating to foreign investment aimed at removing
the distinction between various categories of overseas capital, a move
intended to ensure stability in policy and help Indian firms attract long-term
capital.

The new Foreign Direct Investment Act would seek
to remove the distinction between various categories of overseas fund flows
such as portfolio investment, venture capital, private equity and direct
investment. Rules on external investment in Indian companies make a
distinction between portfolio investment, in which an investor buys shares of
a company from the secondary market, and foreign direct investment (FDI), in
which the investor normally acquires a relatively larger holding directly.
The new legislation would involve major changes to the existing Foreign
Exchange Management Act, or FEMA, which deals with both inbound and outbound
foreign investment.

The new legislation would remove all confusion
and provide stability in terms of policy. The Finance Ministry has already
started work on the new legislation and would seek inputs from the Reserve
Bank (RBI) on it, the official said. The new Act will also give clearer
guidelines on convertibility.

The RBI has consistently been of the view that in
the hierarchy of preferred capital flows, FDI ought to be at the top. The
current policy is largely ad hoc. It is governed by several rules that
are changed through so-called ‘Press Notes’ issued from time to time by the
Department of Industrial Policy and Promotion (DIPP) and FIPB. Interestingly,
the official said the Press Notes issued by the DIPP have no legal sanctity
since changes to guidelines on foreign investment require changes to FEMA
rules, which rarely gets done.

(Source : The Times of India, 8-8-2009)

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British Airways gets Rs1.44 billion tax notice.

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86 British Airways gets Rs1.44 billion tax
notice.


UK-based British Airways has been slapped a service tax
notice by the Revenue Department asking it to pay the balance of Rs.143.5 crore
(Rs.1.44 billion) liability on sale of tickets in India between May 2006 and
November 2007.

 

“We have issued a notice to the British Airways on July 25
intimating the company of its service tax liability,” a senior Excise and
Customs Department official said. He, however, clarified that the company has
already paid Rs.117 crore (Rs.1.17 billion) tax, although after a delay.

(Source : Internet News, 29-7-2008)

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Are you addicted to your BlackBerry ?

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85 Are you addicted to your
BlackBerry ?


Its nickname, CrackBerry, says it all. There is no
recreational use of Research in Motion’s BlackBerry. It is a compulsive
addiction, or you’re not a user.

Academic studies back up the notion. It found that
a third of BlackBerry users show signs of addiction ‘similar to alcoholics’. The
BlackBerry found its first big pool of users in corporate America. Helping with
productivity and collaboration at work, it lets employees keep up with
colleagues, customers and suppliers even while away from the office.


But, like addicts, users of these devices are not
using the time savings and productivity gains to shorten their work hours.
Instead, they work longer. Glenn Wilson, a psychologist at King’s College
London, found that two-thirds of users check work e-mails out of office hours
and on holidays.

Getting more done, thanks to the speed of
communication, doesn’t necessarily enhance the quality of life.

Wilson found that a compulsion to reply to each new
message led to constant changes of direction, which inevitably tired and slowed
down the brain. The distractions of constant e-mails, text and phone messages
are a greater threat to IQ and concentration, he says, than taking cannabis.

Even those most reliant on this technology worry
about never-ending workweeks and the toll imposed by the constant interruptions
to family life and personal relationships—a result of having this umbilical cord
to work. People are always partly somewhere else, whether at dinner or in bed,
surreptitiously glancing down at the glowing screen and stroking the scroll
wheel.

And the suspicion must be that it is double the
trouble when both partners are constantly connected to Exchange servers more
than to each other—especially among couples dubbed DILS and DINS (for double
income, little sex, and double income, no sex).

One solution : Don’t slavishly respond to every
e-mail. In Europe, it is increasingly considered ill-mannered to read an e-mail
that arrives during a meal, let alone answer it, just as it would be considered
rude to read a book at the table during dinner.

King College’s Wilson found in a clinical trial
commissioned by Hewlett-Packard that one in five of those studied broke off from
meals or social engagements to receive and deal with messages. Although nine out
of 10 agreed that answering messages during face-to-face meetings or office
conferences was rude, one-third nonetheless felt that this had become
“acceptable and seen as a sign of diligence and efficiency.”

Stress and a compulsive addiction to overworking
aren’t solely caused by wireless push e-mail, though it makes it easier to get
hooked. And there is a generation that has grown up expecting to connect 24/7 to
friends and family by e-mail, IM and SMS that can separate work and social
never-severed connectivity.

If you are not one of them, you don’t have to go
cold turkey. Remember, even the CrackBerry has an off button.

(Source : Internet Newswires)

 

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FlashGet (size 4.4 MB)

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84 FlashGet (size 4.4 MB)


This is a download manager. It uses MHT
(Multi-server Hyper-threading Transportation) technique, supports various
protocols such as HTTP, FTP, BT, MMS, RTSP and has document management features.

 

FlashGet can call anti-virus automatically to clean
viruses, spyware and adware after finishing download. Check it out at

http://www.flashget.com/index_en.htm

 

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Recover Files (Size 1.17 MB)

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83 Recover Files (Size 1.17 MB)


This is file recovery software that allows the user
to recover accidentally deleted files, even files removed from the Recycle Bin,
network drive, compact flash card, portable drives, in a DOS window, or from
Windows Explorer. Download from

http://www.download.com/Recover-Files/3000-2094_4-10715455.html

 

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The progress challenge — Dean Linsey

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20. The progress challenge — Dean Linsey


In 2010, most of us take on too many
responsibilities, try to do too much, and even own too much. Being too busy is a
big source of stress in today’s get, get, get and go, go, go world. Often, we
are so chronically over-scheduled that we never give ourselves a chance to offer
our best or to enjoy the moment. Are your days fulfilling, or are they merely
full ? It is possible that we could get more out of life by doing less. When we
internalise the difference between full and fulfilling, we realise it’s not how
many events we attend, activities we get involved in, or how much stuff we have
that’s important. We do not have to say ‘yes’ to every demand on our time. And
we shouldn’t feel bad, since we are saying ‘no’ to the event or project, not the
person.

If we are committed to working and winning in this
world of change, we must know our limits and not limit our nos. Consider your
well crafted goals and your schedule before agreeing to additional work.
Simplify — get rid of the clutter and baggage in your life and in your house.
Start your own just say no campaign to regain quality time. Review priorities
and see if a request fits. When you see things that waste time or hinder your
progress, speak up. A polite way to say no to a request for your time : “I’m
quite committed. I can be your backup, but please keep searching.” Structure is
vital for becoming a Business Attraction Magnet. Solid self-management leads to
higher productivity and reduced stress. Our desks need to be workstations, not
storage space.

(Source : The Economic Times, dated 9-10-2010)

 

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Stickies 6.5a (Size 975 KB)

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82 Stickies 6.5a (Size 975 KB)


Stickies is a PC utility to try to cut down on the
number of Post-It notes you leave stuck to your monitor. It is a computerised
version of those notes.


http://www.majorgeeks.com/download5501.html

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India tops list for increase in tax misery score

10. India tops list for increase in tax misery score

    India has earned the dubious distinction of being the country adding the maximum teeth to its tax regime since last year, says a study by Forbes. India still maintains a relatively low rank of 23rd least friendly tax climate in this year’s Tax Misery Index, topped by France with harshest taxes across the world. The country is however, ranked at the top in terms of the increase in its tax misery score, a collective measure of maximum corporate, personal, social security and sales tax rates. India was ranked the 35th least tax-friendly jurisdiction in the 2008 list.

    France, China and Belgium have been named as having the top three harshest tax climates. Qatar, the UAE and Hong Kong have trumped other economies to retain the friendliest tax climate, according to the 2009 Tax Misery and Reform Index. About two dozen countries recorded a decline in their tax misery score and these jurisdictions include Switzerland, Italy, the UK, Canada, South Korea, Malaysia, New Zealand, Singapore, Russia and Taiwan. Besides India, other countries that added to harshness in their tax climate include China, France, Finland, Turkey, Mexico, Luxembourg, Ireland and Thailand.

    Jurisdictions with unchanged tax misery score include Germany, the US, Israel, Vietnam, Pakistan, Hong Kong, the UAE and Qatar. There are eight European nations among the 10 least tax-friendly countries on the list, published in the April 13 edition of Forbes Asia. “This year, most Asian jurisdictions continue to have more tax-friendly environment compared with other parts of the world. The survey shows that outside of China and Japan, the rest of Asia continues to enjoy stable, low tax advantage,” Forbes noted.

    (Source : Business Standard, 06.04.2009 )
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Weekend Ruminations by T. N. Ninan

    9. Weekend Ruminations by T. N. Ninan

    So now we know that while every fourth member of the Lok Sabha has a criminal record, virtually every member is a crorepati. Quite a few would even qualify for membership of the Business Standard Billionaire Club (those with assets of over Rs.1 billion, or Rs.100 crore). We also know that these standard-bearers of socialism (every political party has to swear to this creed if it wants to be registered with the Election Commission) have increased their wealth manifold in the last five years. All this suggests a range of possible hypotheses : that politics is India’s most lucrative profession, that those with criminal records make more money than honest tribunes of the people, that those who speak in the name of the poor and rail against capitalist excesses are actually plutocrats in mufti, that you can get fat on the ‘mammaries of the welfare state’ (every member can ask for Rs.2 crore to be spent on his favourite project, every year; that’s Rs.10 crore in a five-year term), that members can and do make money by asking questions in the House, that members can and do get offered money to vote in a particular way . . . . All this is true even when you do not occupy ministerial office (which brings with it access to more mammaries), and though you have to spend campaign funds vastly in excess of what the law allows . . . .

    We should now take the next logical step. Every government employee should be asked to make similar disclosures, bearing in mind the latest story of the sub-inspector of police in Delhi who has accumulated assets worth Rs.30 crore, on a salary of Rs.30,000. And just so that government employees know what it is like to have the Central Bureau of Investigation on your tail, this hound dog should be asked to do a random check on all annual filings (more mammaries !). For, the truth is that our governments run vast armies of criminal gangs, which seem to be concentrated in places like the police and the tax-gathering machinery, but exist elsewhere too.

    With one honourable exception (Jaswant Singh), hardly any finance minister has done anything to clean up these Augean stables; some of them have even increased the incentive for harassment by placing impossible revenue targets before officials and then cracking the whip, and by writing up the law in such a way that taxmen get extraordinary powers — which become more mammaries to milk. At the last meeting of the CII National Council, companies complained behind closed doors about how they were being asked, on the strength of oral orders, to pay up more tax — with the tax officials refusing to issue written tax demand notices !

    The tragedy is that Jaswant Singh’s attempt to have taxpayers treated fairly and with respect, and his appointment of Vijay Kelkar to recommend ways in which the business could be made less extortionate, have been nullified. After demanding that certain tax filings can only be done digitally, the tax department has made sure that the digital system does not work (so you are in the Kafkaesque situation of being required to do something under the law that the creators of the law will not allow you to do). After mandating that tax evasion will be checked through the scrutiny of digital records, assessments done from a distance so as to minimise the human interface, and refund cheques automatically credited to bank accounts, tax officials do all the things that they have done for years, including waving refund cheques in your face and asking for a cut, not just for themselves but for their brother officers as well. It wouldn’t hurt to have some sunlight thrown on all these murky areas.

    (Source : Business Standard, 11.04.2009)

    (How True ! There are more than 110 crore ‘Cows’ to be milked by the Establishment ! ! ! )

Missing in action

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22 Missing in action

MPs’ absenteeism subverts Indian democracy

Inflation is a burning issue because it eats into the already
meager incomes of the poor, and our politicians are concerned. Right ? Wrong.
MPs revealed how much they really care about rising prices of essential
commodities as opposed to how much they would like us to believe that they care
— by largely playing truant when the matter came up for discussion in both
Houses of Parliament. In the Lok Sabha, even among the few MPs who bothered to
turn up, many staged a quiet exit soon after. The lack of quorum in the House
was dealt with simply by not drawing attention to the inconvenient fact.


Even though India is a democracy, this apathy makes it
resemble a dictatorship. A dictator rules by decree and has the power to silence
the opposition. In a democracy whose politicians are apathetic, the opposition
silences itself. Dissent in a dictatorship can be expressed only through street
protests or militant agitations. That’s also the idiom in which opposition
politicians like to express themselves in India.


In both cases there’s little scope for dialogue or rational
debate. Politics is reduced to posturing or making token gestures. If
politicians want us to believe that they are serious about the causes they
espouse, let them at least show up when the issue is tabled in Parliament. Scant
attendance of parliamentarians reduces democracy itself to a formal affair.

(Source : The Times of India, 16-4-2008)

 

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Samsung chief charged with $ 114m tax evasion. Also helped son gain control

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23 Samsung chief charged with $ 114m tax
evasion. Also helped son gain control


Samsung Group chairman Lee Kun Hee will stand trial for tax
evasion and breach of duty, prosecutors said, after a three-month probe into
allegations of corruption at South Korea’s largest industrial group.

 

Lee, 66, was charged with evading 112.8 billion won ($ 114
million) of taxes, the special prosecutors said at a press conference in Seoul
on Thursday. Lee is also charged with breach of duty for incurring losses at
Samsung when helping his son gain control of units of the group. Nine other
Samsung executives were also charged. Lee, one of South Korea’s richest men, has
denied the allegations. Samsung Group, which accounted for about 20% of South
Korea’s exports in 2006, said it will reorganise its business and management.
President Lee Myung Bak, who took office in February, pledged during election
campaigning to increase corporate transparency and governance after scandals
involving South Korea’s biggest industrial groups.

(Source : Bloomberg)

 

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Corrupt Govt. official’s wife is also guilty : HC

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21 Corrupt Govt. official’s wife is also
guilty : HC


The spouse of a Government officer in a corruption case who
has benefitted from his/her ill-gotten wealth is equally guilty, the Bombay High
Court has ruled. Justice V. R. Kingaonkar of the HC’s Aurangabad Bench recently
held Dhule resident Mangalabai Wagh guilty of abetment in a disproportionate
assets case for allowing her husband Bhaskar Wagh to acquire several properties
in her name.

 

The Judge upheld a Trial Court verdict sentencing Mangalabai
to three years’ rigorous imprisonment and imposing a fine of Rs.2 lakh. The HC
also dismissed an appeal by Wagh challenging his punishment of seven years’
rigorous imprisonment and a fine of Rs.3 lakh awarded by the Trial Court.

 

‘Mangala held shares and immovable property as well as a
vehicle in her name despite not having any source of income,’ said the Judge.
‘It will have to be said that she abetted the commission of offence of criminal
misconduct by (her husband) Wagh,’ he added.

(Source : The Times of India, 9-4-2008)

 

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Quotation of the month

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20 Quotation of the month


 ‘All governmental orders must comply with the requirements of
a statute as also the constitutional provisions. Our Constitution envisages a
rule of law, and not rule of men. It recognises that howsoever high one may be,
he is under law and the Constitution. All the constitutional functionaries must,
therefore, function within the constitutional limits’.










(Source : Supreme Court of India,

The Economic Times, 7-3-2008)

 







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FDI’s free fall

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The existentialist dilemma before Indian democracy is stark :
it cannot co-exist with financial honesty. It does not matter if you are
personally incorruptible; you have to be institutionally corrupt in order to
engage in the business of democracy. The moral code of elections is
uncomplicated : Don’t ask. Don’t tell. And for God’s sake don’t get caught.


M. J. Akbar
in India Today, dated 10-1-2011

59 FDI’s free fall

Falling FDI in both absolute and relative terms indicates a
lack of investor confidence. It should jolt politicians back to governance and
building on the 1991 reforms. A UN report on FDI in 2010 makes this point
sharply. Though global FDI flows increased by a percentage point over the last
year, developing economies’ share jumped 10%. For the first time ever, more than
half of global FDI travelled to emerging markets. However, FDI inflows into
India declined by a whopping 31.5%. And that’s not in relative but in absolute
terms. In other words, it’s not just that India is getting a smaller share of a
bigger pie — indicating its relative uncompetitiveness among emerging markets.
It’s that the size of the pie itself has shrunk for India – by almost a third.
That ought to be enough to set alarm bells clanging for our economic managers.

(Source : The Times of India, dated 25-1-2011)

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Infosys Plans to Stem MBA-MTECH Attrition

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The existentialist dilemma before Indian democracy is stark :
it cannot co-exist with financial honesty. It does not matter if you are
personally incorruptible; you have to be institutionally corrupt in order to
engage in the business of democracy. The moral code of elections is
uncomplicated : Don’t ask. Don’t tell. And for God’s sake don’t get caught.


M. J. Akbar
in India Today, dated 10-1-2011

58 Infosys plans to stem MBA-MTECH attrition

Infosys, the country’s second largest information technology
services firm, is aggressively planning to increase the number of its business
consultants by re-skilling many of its engineers.

“Every quarter, a lot of people leave us for higher courses
like MBA and MTech. We have seen a rise in the interest level of our employees
for consulting work. To tame this and provide growth opportunity for engineers,
we are planning to introduce a new initiative as part of our iRace (Infosys Role
and Career Enhancement) programme,” said Mohandas Pai.

In-house CAT : In-house engineers with over two years of
experience can opt for this programme. The company is expected to do a pilot
test soon and to implement the programme next year. “We will conduct a test for
the employees and if they pass the test, they can join our consulting team,” Pai
added.

(Source : Business Standard, dated 21-1-2011)

 

(Comment : Our profession needs a similar programme)

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RBI promises parity if foreign banks form arms

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The existentialist dilemma before Indian democracy is stark :
it cannot co-exist with financial honesty. It does not matter if you are
personally incorruptible; you have to be institutionally corrupt in order to
engage in the business of democracy. The moral code of elections is
uncomplicated : Don’t ask. Don’t tell. And for God’s sake don’t get caught.


M. J. Akbar
in India Today, dated 10-1-2011

57 RBI promises parity if foreign banks form arms

The Reserve Bank of India (RBI) is dangling the carrot of
near level-playing field to foreign banks such as Citigroup and HSBC, if they
convert into wholly-owned subsidiaries which is essential for systemic safety,
instead of functioning as parents’ branches, leaving room for instability.

MNC banks would be allowed to set up branches at their will
in smaller cities, barring some security-sensitive regions, and list their
shares on stock exchanges with at least 25% Indian holding, said a central bank
discussion paper on Presence of Foreign Banks in India.

Global banks would have a minimum capital adequacy ratio of
10% and lower priority sector lending target than domestic private peers.

There are 34 foreign banks operating in India as branches,
accounting for 7.65% of total banking assets as on March 31, 2010, up from 9.03%
a year ago. If credit equivalent of off-balance sheet assets are included, their
share was 10.52%. The share of top five foreign banks alone was 7.12%.

(Source : The Economic Times, dated 22-1-2011)

 

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SC blames own verdicts for declining standards

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New Page 1

The existentialist dilemma before Indian democracy is stark :
it cannot co-exist with financial honesty. It does not matter if you are
personally incorruptible; you have to be institutionally corrupt in order to
engage in the business of democracy. The moral code of elections is
uncomplicated : Don’t ask. Don’t tell. And for God’s sake don’t get caught.


M. J. Akbar
in India Today, dated 10-1-2011

56 SC blames own verdicts for declining standards

The Supreme Court reprimanded governments for abuse of
discretionary land allotment powers before turning reflective and admitting that
some of its judgments have contributed to the all-round falling standards.

The Bench’s remarks came during the hearing of a petition,
which accused the Madhya Pradesh Government of allotting 20 acres of prime land
at a throwaway price to the Kushabhau Thakre Trust, which has BJP leaders L. K.
Advani and Venkaiah Naidu as trustees. Before reserving verdict, the Court said
: “Discretionary power was to be used in public good. In the last 50 years, this
is exercised just for the opposite. The man who abides by law feels he is a
fool. Every state, not only Madhya Pradesh, who has got discretionary power has
abused it.

(Source : The Times of India, dated 19-1-2011)

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Political governance — End the drift

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The existentialist dilemma before Indian democracy is stark :
it cannot co-exist with financial honesty. It does not matter if you are
personally incorruptible; you have to be institutionally corrupt in order to
engage in the business of democracy. The moral code of elections is
uncomplicated : Don’t ask. Don’t tell. And for God’s sake don’t get caught.


M. J. Akbar
in India Today, dated 10-1-2011

55 Political governance — End the drift

Decision-making isn’t a synonym for governance. Even so, it’s
a good pointer to a ruling dispensation’s ability to be on its toes. On that
score, data shows UPA-II fared badly in 2010. The cabinet’s record on number of
decisions taken in 2010 compared to earlier was below par. Between 2005-08
during the Congress-led coalition’s first tenure, the cabinet took an average of
242.5 decisions yearly. The annual average since 2005 is 183. In 2010, however,
the Cabinet managed consensus on just 112 decisions, the lowest single-year
figure since the UPA came to power. Amazingly, decision-making actually
decelerated post-2009, when the Left was no longer around to ambush it !

(Source : The Times of India, dated 18-1-2011)

 

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Fuel Pricing — Death by policy

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New Page 1

The existentialist dilemma before Indian democracy is stark :
it cannot co-exist with financial honesty. It does not matter if you are
personally incorruptible; you have to be institutionally corrupt in order to
engage in the business of democracy. The moral code of elections is
uncomplicated : Don’t ask. Don’t tell. And for God’s sake don’t get caught.


M. J. Akbar
in India Today, dated 10-1-2011

54 Fuel Pricing — Death by policy

The new Union minister for petroleum and natural gas Jaipal
Reddy can implement the brightest ideas from the smartest bureaucrats and yet
the root of the problem that resulted in the murder of Mr. Yashwant Sonawane, a
district official in Maharashtra who sought to curb the adulteration of petrol
by the kerosene mixing mafia, will not be touched unless India’s fuel pricing
policy is shaped by the logic of simple economics. Various estimates have been
provided in the past few days of the size of the domestic black market in
kerosene. Some put it upwards of Rs.16,000 crore annually. This is a huge amount
of money that can finance large and even globally powerful mafias, not to
mention two-bit gangsters like the ones who killed Mr. Sonawane. There was a
time when Mumbai was in the grip of smugglers. With some simple policy steps
like lower tariffs, liberalisation of gold imports and such like these
all-powerful mafias were marginalised and largely confined to Bollywood movies.
In the case of kerosene and diesel an export smugglers mafia has been created
with India’s lower priced fuels smuggled to Nepal and Bangladesh.

The only way in which mafias get eliminated is by the
elimination of the economic basis for their existence. It is not prohibition
that finally ended the power and wealth of bootleggers and illicit liquor mafia,
but a liberal policy that allowed the sale of properly priced alcohol.

As a first step, the Government must reduce the price
differential between diesel, kerosene and petrol. This will not only have the
positive effect of reducing the fiscal burden of the humungous oil subsidy, but
also encourage a more rational use of both diesel and kerosene. The
under-pricing of these two fuels has encouraged the growth of highly
energy-inefficient and environmentally dangerous means of power generation and
fuel utilisation. Moreover, for an import-dependent country like India
subsidised fuel increases the trade deficit and contributes to external payments
problems.

(Source : Business Standard, dated 31-1-2011)

 

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SC : No govt. wants a strong judiciary

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The existentialist dilemma before Indian democracy is stark :
it cannot co-exist with financial honesty. It does not matter if you are
personally incorruptible; you have to be institutionally corrupt in order to
engage in the business of democracy. The moral code of elections is
uncomplicated : Don’t ask. Don’t tell. And for God’s sake don’t get caught.


M. J. Akbar
in India Today, dated 10-1-2011

(Source : Business Standard, dated 15-2-2011)

53 SC : No govt. wants a strong judiciary

The Supreme Court said no government wants a strong judiciary
and added that meagre budgetary allocations by the Centre and states came in the
way of setting up of courts and infrastructure to speed up the justice delivery
system.

It said : “No government wants a strong judiciary . . .
Budgetary allocation to judiciary is less than 1% by the governments. This shows
their commitment towards judiciary.” The remark from a Bench of Justices G. S.
Singhvi and A. K. Ganguly came when it was told that only one witness has been
examined in the last four years in the Amar Singh phone-tapping case, which has
been marred by adjournments.

(Source : The Times of India, dated 12-2-2011)

 

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Taxing wealth — Has the time come for the super-rich to pay more taxes ?

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New Page 1

The existentialist dilemma before Indian democracy is stark :
it cannot co-exist with financial honesty. It does not matter if you are
personally incorruptible; you have to be institutionally corrupt in order to
engage in the business of democracy. The moral code of elections is
uncomplicated : Don’t ask. Don’t tell. And for God’s sake don’t get caught.


M. J. Akbar
in India Today, dated 10-1-2011

52 Taxing wealth — Has the time come for the super-rich to
pay more taxes ?

One of the high points of economic and fiscal reform in India
in the past two decades has been the progressive moderation of direct tax rates.
Thanks to this, the ratio of direct to indirect taxes has risen, a sign of
greater progressiveness and equity in India’s taxation system. Direct taxes are
not easily passed on, as indirect taxes tend to be, and so their incidence is
more directly on the individual or firm paying the tax. While this has been a
positive trend, the ratio of total tax revenues to national income has, in fact,
come down in recent years and remains below 12%. India has a very low tax/GDP
ratio by world standards. Apart from widespread tax evasion and avoidance, the
complete exemption of certain types of income from taxation, like agricultural
income, has made it that much more difficult for the tax authorities to capture
all taxable incomes.

The wealth of just 657 BS billionaires has been estimated to
be Rs.16 lakh crore. Taxing away just 0.1% of that would yield a revenue of
Rs.16,000 crore. A 10% long-term capital gains tax, with the securities
transactions tax dumped, and a death duty or inheritance tax can easily generate
another Rs.10,000 crore, netting a cool Rs.26,000 crore of additional direct tax
revenue, without hurting the middle class. Not only would this help Mr.
Mukherjee in his fiscal house-keeping but it would give his party a talking
point at a time when it is being accused of corruption and currying favour with
corporates. Some, including the stock market, would cry foul and the Government
must factor that negative response in. But many would cheer a Government dipping
into the deep pockets of the super-rich.

(Source : Business Standard, dated 15-2-2011)

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FDI inflow through tax havens increases manifold — Mauritius, Singapore & Cyprus contribute 61% of FDI inflow in 2007-08.

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68 FDI inflow through tax havens
increases manifold — Mauritius, Singapore & Cyprus contribute 61% of FDI inflow
in 2007-08.


FDI from Mauritius, jumped from Rs.28,759 crore in
2006-07 to Rs.44,483 crore in F.Y. 2008, registering a 55% growth, whereas FDI
inflows from Singapore rose by whopping 362% during the same period, an analysis
based on FDI data reveals. FDI from Cyprus rose over 12 times from Rs.266 crore
in F.Y. 2007 to Rs.3,385 crore.

(Source : The Economic Times, 20-7-2008)

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Pakistani investors stone Karachi Exchange.

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67 Pakistani investors stone Karachi Exchange.


Pakistan investors stormed out of the Karachi Stock
Exchange, smashed windows and cursed regulators after the benchmark index fell
for 15th day, the worst losing streak in at least 18 years. The index has
plunged 35% from the record of 15,676.34 on April 18.

(Source : The Economic Times, 18-7-2008)

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SEC sanctions E&Y.

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66 SEC sanctions E&Y.


Ernst & Young LLP, one of the so-called Big Four
accounting firms, agreed to forfeit more than US $ 2.9-million to settle U.S.
regulatory claims that it compromised its independence while auditing three
companies.


The firm “engaged in improper professional conduct”
after agreeing in 2002 to create an audio series of recorded interviews with
industry leaders in collaboration with Mark Thompson, a board member for three
of its clients, the Securities and Exchange Commission said in a statement on
Wednesday. It didn’t identify the companies.


Best Buy Co., the largest U.S. electronics dealer,
announced plans in 2004 to drop Ernst & Young as its auditor after learning
Thompson, a member of its audit committee, had a separate relationship with the
accounting firm. Thompson earned about half his income by coaching Ernst & Young
partners to conduct talk show-style interviews for its ‘Thought Leaders Series’
of compact discs, the SEC said.

The regulator also cited Ernst & Young’s Chief
Operating Officer, John Ferraro, for allowing the violations. He settled by
pledging to refrain from similar misconduct in the future. Thompson settled by
agreeing to forfeit US $ 123,900.

The firms, like the other defendants in the case,
didn’t admit or deny wrongdoing. Ernst & Young is giving up almost US
$ 2.4-million in audit fees, plus interest.

(Source : Internet Newswire, 6-8-2008)

 

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I-T nod likely to be made mandatory for remittances.

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65 I-T nod likely to be made mandatory for
remittances.


Sources said a certificate from Assessing Officer (AO)
prescribing the rate at which withholding tax is to be deducted would be
required. This regulation existed some years ago, but was done away with to make
the process less cumbersome. However, with increase in remittances, both
corporate and individual, there is a growing feeling in the Department that tax
could be escaping the Department’s eye.

 

Tax experts feel this condition would create an unnecessary
roadblock. They feel the Department should specify a threshold or exempt
requirement of NOC in cases where no tax is payable.

(Source : The Economic Times, 8-8-2008)

 

[Compilers’ Note : Bureaucrats always want to gain and
regain controls. Does the Department have the time and requisite resources to
scrutinise even the Remittance Certificates issued by CAs u/s.195 ?]

 

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Top companies ignore ICAI rule on forex loss treatment.

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63 Top companies ignore ICAI rule
on forex loss treatment.


First-quarter results of several big companies such
as Reliance Industries, Reliance Communications, Bharti Airtel and Jet Airways
would have been a lot worse had they followed the Accounting Standards (AS) 11
rules prescribed by the Institute of Chartered Accountants of India (ICAI).


Most of these companies, however, chose to comply
with Schedule 6 of the Companies Act, which is at variance with the treatment
prescribed in AS-11 for the exchange loss incurred on foreign
currency-denominated liabilities for acquiring fixed assets.


For example, if the forex loss on this account were
taken to the profit and loss (P&L) account as required under AS-11, the net
profits of Reliance Industries for the quarter-ended June would have been 23%
lower than reported. Similarly, Reliance Communications’ net profits would have
shrunk 70% if it had taken the forex loss on the P&L account.

“The effect of changes in foreign exchange rates
has to be charged to the profit and loss account. The standard has been notified
by the Government and is part of the rules. Any violation has to be dealt with
by the Government,” said ICAI President Ved Jain.

The problem is that the Companies Act has not gone
through a consequential amendment.

“The three agencies (Sebi, ICAI and the Ministry of
Company Affairs) need to work in tandem so that there’s no ambiguity,” said
Sanjay Aggarwal, Head, Financial Services, KPMG.

(With inputs from Business Standard Research
Bureau
)

(Source : Business Standard, 6-8-2008)

 

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ICAEW Joint Disciplinary Scheme fines KPMG £ 1.6 million.

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64 ICAEW Joint Disciplinary Scheme
fines KPMG £ 1.6 million.


In its latest batch of disciplinary orders and
regulatory decisions, the ICAEW has found KPMG at fault for its work on the 2000
audit of Independent Insurance Group.


The firm “accepted that loss could be turned to
profit by using stop loss insurance which was too good to be true”. KPMG’s audit
partner, named as a Mr. Sayers, was advised by the firm’s concurring partner to
confirm the stop loss terms directly with the reinsurers. No reason was provided
for why the audit partner failed to do this. Independent’s actuaries, Watson
Wyatt, told Sayers that they “did not understand why the reinsurers were writing
these contracts when they appear to be obviously loss making.”


It subsequently turned out that Independent had
agreed to pledge £ 141 million as a condition of obtaining the stop loss, and
there were further agreements which limited the liability of the reinsurers and
sought to pass risk on to an Independent subsidiary. In addition, a different
stop loss contract required the payment of a premium of £ 1.6 billion over four
years. Shortly afterwards Independent’s Chief Executive resigned and the company
went into liquidation.

Eight years after the event, KPMG were finally
reprimanded by the Institute, fined £495,000 and ordered to pay costs of £ 1.15
million.

(Source : Internet Newswires, 8-8-2008)

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Da Vinci copied Chinese art, says British historian.

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62 Da Vinci copied Chinese art, says British
historian.


Leonardo da Vinci’s drawings of machines are
uncannily similar to Chinese originals and were undoubtedly derived from them, a
British amateur historian says in a newly-published book.


Gavin Menzies sparked headlines across the globe in
2002 with the claim that Chinese sailors reached America 70 years before
Christopher Columbus.


Now he says a Chinese fleet brought encyclopedias
of technology undiscovered by the West to Italy in 1434, laying the foundation
for the engineering marvels such as flying machines later drawn by Italian
polymath Leonardo.

The 70-year-old sold more than a million copies of
his first book, “1421”, which argued Chinese sailors mapped the world in the
early 1400s before abandoning global seafaring.

To support his argument, Menzies publishes drawings
of weapons, mills and pumps from a 1313 Chinese agricultural treatise, the Nung
Shu, and from other pre-1430 Chinese books, next to apparently similar
illustrations by Leonardo, Di Giorgio and Taccola. “By comparing Leonardo’s
drawings with the Nung Shu we have verified that each element of a machine
superbly illustrated by Leonardo had previously been illustrated by the Chinese
in a much simpler manual,” he says.

(Source : The Times of India, 30-7-2008)

 

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Auditing your Auditor

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When telecommunications provider IDT decided to switch
auditors from Ernst & Young to Grant Thornton in early 2008, the “driving force
was to save money,” says CFO Bill Pereira. It worked. Part of a companywide
effort to reduce corporate overhead, the move cut IDT’s $ 4.3 million audit bill
almost in half. Although initially “we were fearful of leaving the Big Four,”
says Pereira, “in retrospect, we are really happy with the decision.”

In fact, the switch went so smoothly that IDT declined to
announce the renewal of Grant Thornton’s contract in its most recent proxy —
because IDT was open to switching again. “We knew there had been changes in the
market and we wanted to evaluate where fees stood,” says Pereira. “We didn’t
just make the automatic assumption that we’d stick with Grant Thornton. We felt
it was our responsibility to do our homework.” (IDT eventually did renew with
Grant Thornton — and cut its bill by nearly another million dollars, to $ 1.42
million last year.)

Welcome to the new auditor-client relationship. In the wake
of the Sarbanes-Oxley Act of 2002, audit fees soared, auditors dumped risky
clients by the hundreds, and ‘value-added’ services all but vanished under the
weight of new independence rules. Today, the reverse is true. Audit fees have
been dropping across the board since 2007. In 2004, more than a third of auditor
changes were the result of audit firms walking away from clients. Last year, 82%
of auditor changes were because companies fired their auditors (among the Big
Four, the number was 90%). And companies aren’t just negotiating lower fees;
they are also demanding more value — read ‘services’ — covering everything from
corporate-board education to competitive intelligence.

Publicly traded companies alone spent $16 billion on audit
and audit-related fees in 2008, with nearly 7,000 companies paying more than $
100,000 each year, and 2,585 paying more than $ 1 million, according to CFO’s
analysis of data from Audit Analytics. Little surprise, then, that half of all
CFOs now say they regularly (at least every two years) benchmark what their
company pays its external auditor against what their peers pay, according to the
latest Duke University/CFO Magazine Global Business Outlook Survey.

Unusually low or high fees both can signal trouble: weak
audits for the former and potential conflicts of interest for the latter.
“Companies paying the highest fees (may do so to gain) more flexibility and
aggression in accounting,” says Whisenant. He has done studies that suggest that
fees that are unexpectedly high or low “can both lead to conditions where the
shareholders do not benefit.”

Take, as an extreme case, Fannie Mae, which in 2003 paid a
surprisingly low $ 2.7 million for its audit by KPMG. An accounting scandal the
following year subsequently caused the company’s audit bill to soar to $ 203
million (paid to Deloitte & Touche after KPMG was dismissed).

More recently, in building its case against David Friehling,
auditor of Bernie Madoff’s Ponzi scheme, the SEC charged him with raking in
“substantial fees.” But, in fact, the opposite is true : that Madoff’s
multi-billion-dollar fund paid the tiny audit firm of Friehling & Horowitz a
mere $ 186,000 per year should have been a glaring red flag.

(Source : CFO.com, 1-4-2010)

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ICAI says Shahajahan scam may run into crores

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In the wake of a chartered accountancy student’s arrest last
week for allegedly forging documents using a CA’s stamps and seals, the Pune
branch of the Institute of Chartered Accountants of India (ICAI), now suspects
the accused may have misused stamps and seals of more chartered accountants in
the city.

Shahajahan Khurshid Khan allegedly made duplicates of stamps
and seals of CA Sunil Shankar Yelol with Yelol’s ICAI membership number for tax
audit of M/s. Jagtap Automobiles and duped Yelol of Rs.9.80 lakh.

The incident came to light when Jagtap Automobiles decided to
hand over their audit work to another CA, Vijay Anpat. Following the CA
protocol, Anpat called up Yelol to obtain his no-objection certificate about the
handover. Yelol realised that Jagtap was not his client, but the stamps and
seals carried his membership number.

According to the ICAI legal advisor, advocate V. B. Khatri,
Khan may have used the stamps and seals for people who had applied for bank
loans to get TDS refunds and so on.

(Source : forum4finance.com, 21-3-2010)

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Case pile-ups a danger for democracy : PM

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The Congress leadership expressed concern over mounting
judicial pendency with Prime Minister Manmohan Singh and UPA chief Sonia Gandhi
saying they were robbing the sheen from the democratic system which aims to
provide speedy justice to aam admi.

The duo, while seeking a way out from the halting wheels of
justice, said the Gram Nyayalayas Act would prove a big step in removing the
pendency. The PM urged the states to take immediate steps to operationalise the
law. Sonia said 2.5 crore cases were pending at various levels across the
country. In a telling comment, the PM mentioned the concern over judicial
backlog while adding that democracy will have little meaning for the common man
if he could not “secure basic rights and easy access to speedy justice”.

While Sonia was mild in her observations, she added that
“speedy, effective and affordable justice” was a party objective. She said the
Gram Nyayalaya Act would bring justice at the doorsteps of rural masses. It will
add 5000 courts for which the Centre will give Rs.1400 crore, she said, adding
they will cut the arrears that stood at 2.5 crore.

(Source : The Times of India, dated 28-3-2010)

 

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Crisis of merit in lower judiciary

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Judiciary faces a crisis of merit at a crucial layer as
majority of the states are finding it difficult to fill 25% of district judge
posts through a limited departmental examination that was devised to give talent
a speedy promotion route.

This became clear before the Supreme Court as senior advocate
Vijay Hansaria as amicus curiae pointed to the large number of vacancies in
district judge posts, which is the highest level in the lower judiciary
responsible for fighting the huge pendency of nearly 2.6 crore cases. The large
number of posts falling under the cadre of Higher Judicial Service was mainly
vacant due to failure of existing judicial officers to clear the tough
departmental competitive test. The situation is so bad that in Tripura, eight
posts were advertised under the speedy promotional route but only two candidates
applied, Hansaria said. This was the situation in almost all states.

Rao gave a chart of the vacancies under 25% quota for speedy
promotion through competitive examination. It said West Bengal had 50 vacancies,
Uttar Pradesh 24, Maharashtra 42 and Orissa 12. The Apex Court had noticed on
January 13 that in Bihar, though 16 posts were available, the HC could fill only
two.

(Source : The Times of India, dated 26-3-2010)

(Note : The origin of the problem lies in very poor
remuneration and pathetic quality of education and training in Law. The Law
Colleges are proliferating as it requires only a few class-rooms and a few book
shelves for a library. There is no supervision or control over quality of
education and training provided. Many persons enrol in these colleges ‘to be
student’ and enjoy the privileges, benefits and protection bestowed on
students.)

 

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DTC not to override tax treaties

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The government might drop the draft Direct Taxes Code (DTC)
proposal that virtually gives Indian tax laws supremacy over the Double Taxation
Avoidance Agreements (DTAAs) with other countries.

The move’s implication is that the India-Mauritius DTAA,
which underpinned the emergence of the small island nation as the largest source
of foreign investment in India, along with more than 70 other bilateral tax
treaties, would not automatically become subservient to the Code when it kicks
in from April 1, 2011.

The revised draft would be ready in about two months. While
the proposed EET (exempt-exempt-tax) method for taxation of savings is a concern
for individual taxpayers, the proposal to impose MAT on gross assets (opposed to
book profits now) is worrisome to corporate India. When asked about these
proposals, Moorthy said, the revised DTC draft would reflect conceptual changes
in these proposals as well.

(Source : The Financial Express, dated 25-3-2010)

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Another writ petition filed against foreign law firms and LPO

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Keeping in tune with the weather, the heat on practice of law
by foreign advocates in India has just been turned up. Petitioner A. K. Balaji,
a practising advocate of Tamil Nadu (‘Petitioner’), has filed a writ petition in
High Court of Madras (‘High Court’) alleging non-action on part of various
government bodies. The petitioner has claimed that numerous foreign law firms
are allegedly violating provisions of Indian Advocates Act, 1961 (‘Advocates
Act’) by providing legal services in India.

The petitioner has filed a writ petition against Bar Council
of India, Government of India, a business-process outsourcing firm and several
well-known foreign law firms (‘Respondents’) alleging violation of the Advocates
Act, Immigration laws and the Income-tax Act, 1961.

The petitioner has claimed that the interpretation of the
Advocates Act is to allow only an ‘Advocate’ registered under the Advocates Act
to practise law anywhere in India. As such the Advocates Act allows a foreign
citizen to practise law in India only if the person possesses necessary
educational qualification and the country of citizenship allows Indian citizens
to practise law in their country on a reciprocal basis. In absence of a
reciprocal arrangement, Indians are not allowed to practise law in most
jurisdictions without taking further set of educational courses and other tests,
such as QLTT in case of UK or the state bar examination in case of the US. No
such requirement of taking a qualifying examination or programme, apart from a
qualifying legal education, is necessary for enrolling as an ‘Advocate’ under
the Advocates Act.

The petitioner has made various government bodies such as
Income-tax Department, Ministries of Finance and Law, and other immigration
offices responsible for not taking cognizance of the alleged violation of
various laws by the respondents. The petitioner claims to have made a
representation in the past to these agencies, and due to lack of responsiveness,
has filed a writ petition with the High Court under Article 226 of the
Constitution of India against the government and its agencies to take
further action in this respect.

(Source : nda@ndalaw.com, dated 23-3-2010)

 

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JD(S) chief defends tainted netas

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Former Karnataka Chief Minister and JD(S) chief H. D.
Kumaraswamy brazenly stated that he saw nothing wrong in fielding criminal
candidates for elections if they looked ‘winnable’.

Kumaraswamy said his criterion for handing tickets to
criminals was simple : he should have the support of party workers and people,
and be able to win. Asked whether it was right to bring criminals into politics,
he asked, “What’s wrong ? It’s a chance to reform them. If they change, isn’t it
better for society ? Moreover, if people want a criminal to contest, how can we
reject him only because of his
background ? There are so many politicians with clean image but engaged in
anti-social activities. Why aren’t such white-collar criminals ever questioned
?’’ Kumaraswamy asked.

(Source : The Times of India, dated 23-3-2010)

(Note : What kind of public welfare programmes and policies
these criminals, when elected, will frame ? What happens if they hold a cabinet
berth ? And, what happens if they become CM or PM ? Can you expect any
political, social, judicial or educational reforms from such criminal elements
?)

 

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New foreign asset disclosure rules enacted

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On March 18, 2010, President Obama signed H.R. 2847, the
Hiring Incentives to Restore Employment (HIRE) Act, into law. There are a number
of international tax provisions in the Act.

One of the provisions is new Code § 6038D. This section,
titled ‘Information with Respect to Foreign Financial Assets,’ is effective for
taxable years beginning after March 18, 2010 (2011 for calendar year taxpayers).

Code § 6038D applies to individuals who hold one or more
interests in ‘specified foreign financial assets,’ if the aggregate value of all
such assets exceeds $ 50,000. If the section applies, the individual must attach
to his/her tax return for that year certain basic information about the foreign
financial assets. The rule also applies to domestic entities formed or availed
of to hold specified foreign financial assets.

The penalty for failure to disclose is the (standard) $
10,000 with a reasonable cause exception. The penalty can increase where the
taxpayer has been notified of the failure to file and the taxpayer continues to
not file.

(Source : intltax.typepad.com/intltax, dated 18-3-2010)

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Operations of foreign accounting firms — India would want full reciprocity

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Turning the table on the Big Four audit firms about their
India plans, Corporate Affairs Minister Salman Khurshid has asked them to spell
out unambiguously if they intend to start full-fledged operations in India, and
be fully accountable for their operations in the country if permits are given.
Also, India would want full reciprocity —that is, permission for Indian
accounting firms to carry out full-fledged operations, with the same level of
freedom, in the Big Four’s home countries.

The Minister said that these audit firms — KPMG, Deloitte
Touche Tohmatsu, Ernst & Young and PricewaterhouseCoopers — haven’t stated
clearly enough how they would roll out their operations in India.

President of the Institute of Chartered Accountants of India
Amarjit Chopra echoed the Minister’s views, stating that though foreign firms
are very keen to carry out full-time practice in India they shy away from taking
any responsibility. “Foreign audit firms are doing surrogate practice in India.
They want to practice here, but do not want to take any responsibility. That’s
astonishing,” he said. Chopra added even ICAI would look at ways to tighten the
auditing practice in India in the coming months.

(Source : www.indianexpress.com, dated 19-3-2010)

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Ancestral property cannot be gifted away, says Bombay HC

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No part of an ancestral family property can be ‘gifted’ away,
the Bombay High Court has held in a significant order while resolving the
dispute over a 69-year-old gift deed. Justice C. L. Pangarkar declared as void
the document dating back to 1941, which said that Miraj resident Mallapa had
gifted a portion of his ancestral property to his second wife Chandrabai ‘out of
love’.

Referring to Hindu laws, Justice Pangarkar held that the
‘coparcener’ or co-heir had no power to gift a joint family property, unless he
is the sole surviving legal heir.

Justice Pangarkar pointed out that as per Mitakshara, a
person can gift a portion of the family property only during certain
eventualities — “during distress for the sake of the family and especially for
pious purposes’’.

(Source : The Times of India, dated 18-3-2010)

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Include CAs in CBI teams on corporate scam probes

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The CA institute is keen on having a role in the probes
undertaken by the Central Bureau of Investigation (CBI) or Serious Frauds
Investigation Office (SFIO) on any financial irregularities or corporate scams.
“We want an ICAI representative to be included in their (CBI or SFIO) team
whenever they go to any State. A chartered accountant would come in handy in
tracking the money flows in any such scams,” Mr. Chopra said. The decision to
approach the Government for this purpose was taken at a specially convened
meeting of the ICAI Central Council here.


(Source : The Hindu Business Line, dated 14-3-2010)

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Hyundai’s Chung told to pay $ 60 mn

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Hyundai Motor Co. Chairman Chung Mong Koo was ordered to pay
70 billion won ($ 60 million) to the carmaker following his 2008 conviction for
breach of duty.

The Seoul Central District Court also today ordered Kim Dong
Jin, the carmaker’s former vice-chairman, to pay 55 billion won to the company,
court spokesman Kim Seong Soo said by phone.

Solidarity for Economic Reform, which led shareholders suing
for damages, said it would appeal to a higher court to seek more money. Chung,
71, was found guilty of embezzlement and breach of duty in 2008 and given a
three-year suspended jail sentence before being pardoned by South Korean
President Lee Myung Bak. “We welcome the court’s ruling that management had a
clear responsibility in this case,” Kim Hong Kil, a researcher at Solidarity for
Economic Reform. The group had asked the court to force Chung and Kim to pay
563.1 billion won to the automaker.

(Source : Business Standard, dated 9-2-2010)

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IIM-A grads look for money and more

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The lure of high salaries is back on IIM campuses this
placement season, but students aren’t getting swayed. They’re looking for job
offers that give them a work-life balance.

Students at the country’s premier management institute, the
Indian Institute of Management Ahmedabad (IIM-A), have moved up many notches on
the hierarchy of needs. The bulge of pay packets isn’t the only thing that
entices them in selecting an employer.

“There seems to be an increasing awareness about work-life
balance in Generation Y. Their outlook on life is far different from the
youngsters of the 1980-90 generation. The general perception that youngsters in
age group of 20-25 years offer to work for longer hours is fast changing,” he
says.

(Source : The Economic Times, dated 24-2-2010)

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49 lakh I-T refunds pending : Govt.

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The government today said around 49 lakh cases of income-tax
refunds are pending with the Revenue Department. The statutory time limit to
process the return and issue refund in financial year 2009-10 is March, 31,
2011,” Minister of State for Finance S. S. Palanimanickam informed the Rajya
Sabha in a written reply. Guidelines have been issued by the CBDT to process all
returns and issue refunds expeditiously.


(Source : Business Standard, dated 9-3-2010)

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Idle chitchat can leave you miserable — Indulging in deep and meaningful conversations makes people happier

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Those idle chats at the coffee machine about the weather or
last night’s TV may seem perfectly harmless. But don’t be so sure. Indulging in
chitchat, gossip and small talk can leave you feeling miserable, scientists
claim. According to psychologists from the University of Arizona in the US, a
person’s well-being is directly related to indulging less in small trivial talks
and more in deep and meaningful conversations. “Profound conversations have the
potential to make people happier. The findings suggest that a happy life is
social and conversationally deep, rather than solitary and superficial,”
co-author Matthias Mehl said.

The other, less surprising, finding was that happy people
tend to spend less time alone. The happiest participants spent 25% less time
alone and 70% more time talking than the unhappiest.

(Source : The Times of India, dated 8-3-2010)

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IFRS convergence : CBDT to start talks with CA institute

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The Central Board of Direct Taxes (CBDT) plans to intensify
discussions with the ICAI to examine the direct tax issues arising out of the
proposed convergence of the Indian Generally Accepted Accounting Principles (GAAP)
with the IFRS. “We have not addressed the issue of IFRS so far. But we intend to
do that and talks will begin in right earnest in this regard with the Institute
of Chartered Accountants of India (ICAI),” Mr. S. S. N. Moorthy, Chairman of the
Central Board of Direct Taxes (CBDT), told Business Line here. The convergence
with IFRS is expected to happen in three phases beginning April 1, 2011.

The draft Direct Taxes Code, in the present form, is very
averse to IFRS and does not recognise fair value measurements or the concept of
present values for taxation purposes. It could however benefit Indian companies
with international presence or even multinationals here as they would be able to
support their transfer pricing claims in a better manner through the common IFRS
platform now available in many countries. Another important issue is that IFRS-based
financial statements are consolidated financial statements and there is concept
of group tax. But in India, there is no concept of group tax and the Indian
Income-tax Department looks at each entity separately. Meanwhile, ICAI
Vice-President, Mr. G. Ramaswamy, said that the CA institute had recently set up
a joint study group comprising CBDT and Income-tax Department officials and that
the discussions are expected to intensify in coming days.

(Source : The Hindu Business Line Newspaper, dated 5-3-2010)

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India v. China — The roads not taken

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China stimulated its economy with a huge burst of capital
investments while India chose to spend more on salaries and subsidies. The
numbers speak for themselves. In 2009, the Chinese government built or renovated
35 airports, threw open 4,640 km of highways, laid out 5,200 km of new rail
lines, upgraded 264,000 km of power lines and renovated 800,000 buildings for
good measure.

India continues to nurture a massive revenue deficit while it
cuts essential capex.

(Source : Quick Edit in Mint, dated 9-3-2010)

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Coaching classes to hire CAs

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At Ahmedabad-based Fountainhead, a little-known coaching
academy for chartered accountants, February 20 was a day of celebration. The
two-year-old chartered accountants’ training institute was playing host to a
recruiting team from global consulting firm Ernst & Young (E&Y), rated among the
world’s top four. It got 11 of its students placed with the consulting firm.

Corporates, including international audit and consulting
firms like E&Y, KPMG and PWC, are looking beyond placement through apex
professional body Institute of Chartered Accountants of India (ICAI) and
directly approaching training institutes in smaller cities to save on costs and
meet the growing requirement for CAs in a recovering economy.

E&Y and PWC have been visiting coaching classes in Jaipur,
Indore and Chandigarh for the past two years. Ahmedabad is the latest addition
in their hiring itinerary. Jaipur, India’s largest centre for CA training,
contributes 10-12% of the total number of chartered accountants every year.

Costs play a huge role in companies going directly to
training academies. ICAI, which plays a facilitator in recruitments, invites
companies and charges them around Rs.1.5 lakh.

With economic growth slated to reach 8%-plus levels this
year, the demand for chartered accountants is expected to see a 50% rise. ICAI
hopes to place 3,000 CAs, up from 2,000 graduates last year.

(Source : The Economic Times, dated 5-3-2010)

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Arbitration delays

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  1. Arbitration delays

Arbitration delays hit investor mood. Leading US-based
investment bank Lehman Brothers, affirmed last week that India remained one of
the world’s hottest investment destinations, but while the market and business
opportunities beckon, the adjudication of commercial disputes is still a thorn
for many investors looking for a system that would make things easier.

Experts say arbitration, involving a friendly third-party
to help business disputes, suffers many handicaps in India, dampening foreign
investor sentiment somewhat. The Arbitration and Conciliation Act, 1996, has
failed to provide an effective alternative redressal for commercial disputes,
because arbitration has become the beginning of a litigation, while elsewhere
in the world, it usually marks the end. “Companies are losing trust in the
arbitration process in India. In-house advocates are advising their clients
not to insist for an arbitration clause in agreements”, says Dushyan Dave, a
senior Supreme Court Advocate.

Jurists argue that with a 2-Judge Bench decision in 2003,
the Supreme Court enlarged the extent to which Courts can intervene in
arbitration proceedings. This, says Dave, has increased litigation on arbitral
awards in the Indian Courts. “Several decisions by the Courts have truncated
Article 16 of the model law evolved by UNCITRAL. As a result, Judges can now
actually enter into an arbitration treaty while deciding on the question of
appointing an arbitrator”, adds Dave. The Law Commission had in 2003 said the
delays in arbitration proceedings have practically made it similar to the
Indian judicial system and an expensive proposition for corporate houses.
“Therefore, the commission had recommended fast track arbitration wherein
arbitrators were required to sit for five hours every day”.

(Source : Hindustan Times, dated 11.05.2009)

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Deal-making hubris

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  1. Deal-making hubris

Ratan Tata’s admission of poor timing in Corus and Jaguar
Land Rover deals must be applauded for courage and openness.

It is rare for a businessman to readily admit in public
that he has made a mistake with a major business decision. In recent times,
perhaps, only Warren Buffet has admitted to being “dead wrong” in the
investment decisions that he made in 2008. From that point of view, Ratan
Tata’s admission to a British newspaper of poor timing in the Corus and Jaguar
Land Rover (JLR) deals in 2007 and 2008, respectively, must be applauded for
courage and openness. But Mr. Tata was not the only Indian businessman to be
afflicted by the irrational M&A exuberance of those years.

The Tata group is now grappling with the consequences of
both acquisitions. The Anglo-Dutch steelmaker Corus, for which Tata Steel paid
$6.7 billion following a bruising auction against Brazilian rival CRN, is
currently reeling under losses. A rescue package for one of its UK plants fell
through after four international companies terminated their contract with the
organisation, raising fears of 2,000 job losses.

(Source : Business Standard, dated 12.05.2009)

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Tax Reforms in USA — Follow Obama’s lead

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  1. Tax Reforms in USA — Follow Obama’s lead

Before anyone in India gets hot under the collar about US
President Barack Obama’s tax proposals, because they might seem targeted at
job creation in ‘Bangalore’, it is important to understand what he is trying
to do. For, on any rational basis, it is hard to be critical. American
companies that invest abroad have been tax-exempt on the profits from such
businesses until they bring the profits back into the US; however, they have
been allowed to claim a set-off on the expenses related to such investment.
This has been an open invitation to invest overseas and not in the home
market, especially if the money is routed through tax havens so that the firms
pay no tax on their profits anywhere.

Mr. Obama has called this a ‘scam’, a term to which
American businessmen have taken umbrage, but it is hard to think of it in any
other terms. The figures trotted out, showing that effective tax rates on such
investments have been in the 2-3 percentage points range, support the
president’s drive to raise the effective level of tax on such corporate
activity, at a time when he is running a gigantic deficit and needs money for
other programmes. Indeed, India should do likewise (companies that borrow
money to invest overseas, and claim a tax set-off on the interest cost of the
loan, should not get a set-off unless they remit the profits home and pay tax
on it). In other words, this is not about jobs in Bangalore or Buffalo, though
that is how Mr. Obama put it somewhat dramatically.

(Source : Business Standard, dated 07.05.2009)

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Nominee is not sole heir of property : Bombay HC

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  1. Nominee is not sole heir of property : Bombay HC

A nominee of a property in a housing society does not
automatically become the absoluteowner of the property after the death of the
original owner, the Bombay High Court has ruled in an important order.
Delivering the verdict Justice A P Deshpande said it would be the personal law
of an individual that would determine the successor to the property and not
the nomination under the Cooperative Societies Act. “The Maharashtra
Cooperative Societies Act (MCSA) does not provide for a special rule of
succession altering the rule of succession laid down under the personal law,”
the Judge said, citing two earlier judgments. The Court held that a nominee
did not become the ‘absolute owner’ and was empowered only to hold the
“property in trust for the real owners, that too for the purpose of dealings
with the society”.

(Source : The Times of India, dated 06.05.2009)

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SC snubs retd Judges for charging heavy fee in arbitration cases

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  1. SC snubs retd Judges for charging heavy fee in arbitration
    cases

The Supreme Court has disapproved retired Judges charging
exorbitant fees in arbitration cases. A Bench comprising Justices R. V.
Raveendran and H. L. Dattu, while dismissing the appeal of the Centre
challenging a Delhi High Court order appointing a retired Judge of a High
Court as sole arbitrator in a dispute between the Railways and a contractor.
Institutional arbitration has provided a solution as the arbitrators fees is
not fixed by the arbitrator themselves on a case to case basis but is governed
by a uniform rate prescribed by the institution under whose aegis the
arbitration is held.

Another solution is for the court to fix the fees at the
time of appointing arbitrator, with the consent of parties, if necessary in
consultation with the arbitrators concerned.

What is found to be objectionable is parties being forced
to go to an arbitrator appointed by the court and then being forced to agree
for a fee fixed by such arbitrator, the Bench said.

(Source : Media Reports & Internet, dated 11.05.2009)

(Compiler’s Note : Arbitration proceedings have become
as costly and time-consuming as the main litigation. After getting an Award,
there is another round of litigation to get it enforced !)

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Black money trail : Swiss ready to revise treaty

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  1. Black money trail : Swiss ready to revise treaty

The Government has approached Swiss authorities to
renegotiate its Double Taxation Avoidance Agreement (DTAA), a tax treaty
between the two countries in force since 1995, to obtain details of bank
accounts maintained by Indians in Switzerland.

The Swiss Government has in the past refused to share bank
information pertaining to Indians with New Delhi on the ground that such
details were not necessary for application of the DTAA. Swiss authorities had
expressed inability to provide details, citing their own laws, since India’s
requests were related to enforcement of its internal tax laws.

India is part of the task force constituted by the G-20 at
its London summit to formulate a “global plan for recovery and reform which
promises to take action against non-cooperative jurisdictions, including tax
havens and also to deploy sanctions to protect public finances and financial
systems”. On alleged role of Swiss banks in the 2004 stock market crash, the
affidavit said that Securities and Exchange Board of India had in 2005 barred
Swiss financial institution UBS Asia from issuing and renewing any
participatory notes for a year. But this was following its refusal to disclose
information relating to an investigation carried out by SEBI, not for its role
in the market crash.

(Source : The Times of India, dated 04.05.2009)

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Over 30,000 cases in ITAT pending, 77% filed by taxmen

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Over 30,000 tax litigations
are pending in the Income-tax Appellate Tribunals across the country, though
most of these appeals are filed by the tax department and not the assessees,
Minister of State for Finance S. S. Palanimanickam said in the Lok Sabha today.


(Source : The Times of India, dated 9-12-2009)

(Compiler’s Note : This is due to repetitive appeals
routinely filed by the department without application of mind and nobody is held
accountable. The ITAT is not able to dispose of the appeals due to frequent
adjournments sought by the DRs.)

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Soon, stamp registration offices will be open till 9 p.m.

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Offices of the
sub-registrars of the stamp and registration department will be more
people-friendly now. Many offices in Mumbai, Thane and Pune will be relocated
and operate in two shifts from 7 a.m. to 9 p.m. Besides, 29 new offices will be
opened in the three cities, for which the stamps and registration department is
buying properties.

The number of documents
which come for registration has increased. As a result, 29 new posts of
sub-registrars and 116 staffers have been created. Officials said the department
had purchased 1,01,185 sq.ft. of office space in Mumbai, Thane and Pune, worth
Rs.108 crore.

(Source : The Times of India, dated 25-2-2010)

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I-T dept. flouts rules, to pay costs

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  1. I-T dept. flouts rules, to pay costs

The Income-tax Department routinely imposes cost on
assesses for late filing of returns or delayed tax payment. For a change, it
was at the receiving end when the High Court imposed a cost of Rs.25,000 for
retaining books of accounts impounded from a city builder for almost five
years.

Justice D. V. Shylendra Kumar, while disposing of the
petition filed by Shubha & Prabha Builders Private Ltd., observed that the I-T
Department couldn’t flout its own rules and regulations.

(Source : Media Reports & Internet, dated 27.04.2009)

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Lalu gave railway jobs in lieu of land

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2 Lalu gave railway jobs in lieu of
land



In the worst attack on Railway Minister Lalu Prasad
since the allegations of his involvement in the fodder scam in the 1990s, the
JD(U) on Tuesday claimed that Lalu and his family acquired landed properties
worth over Rs.100 crore over the last four years through means that are not
above board.


State JD(U) President Rajiv Ranjan Singh released
land registry papers running in 500 pages as ‘evidence’. He claimed Lalu
‘invented’ three methods for amassing land. One, poor people’s plots were
transferred in the name of family members as deed of absolute sale in return for
railway jobs. Two, lands were gifted to Lalu’s kin by RJD leaders. Three, plots
exchanged ownerships in return of favours by the Railway Ministry.

The plots have been registered in the names of
Lalu’s wife Rabri Devi, daughter Misa Bharti and sons Tej Pratap and Tejaswi.
Some of the them have also been registered in the name of Delhi-based Delight
Marketing Company, owned by Lalu aide and Union Minister Prem Gupta’s wife,
Singh said.

The JD(U) leader said Lalu’s father-in-law Shiv
Prasad Choudhary was a landless poor in government records and, as such, was
given government land in 2000. Four years later, he became Shiv Prasad Yadav and
‘purchased’ land measuring 20 katthas and 21 dhurs from two persons. In 2006, he
gifted the land to Rabri.

Union Ministers Kanti Singh, Raghunath Jha and
Jayaprakash Yadav, too had gifted land to Lalu’s kin, Singh claimed, hinting it
was to wangle ministerial berths.

(Source : The Times of India, 13-8-2008)

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SEBI set to fine 7 investment bankers for ‘shoddy work’

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1 SEBI set to fine 7 investment
bankers for ‘shoddy work’


Capital market regulator SEBI is set to impose
penalties on some of India’s top investment bankers for what it considers
‘shoddy work’ done by them while handling public offerings over the past few
years. The regulator’s Market Intermediaries Regulation and Supervision
Department (MIRSD) has uncovered serious shortcomings in the due diligence
process for initial public and rights offerings, besides open offers, carried
out by seven investment bankers — Kotak, Enam, DSP Merrill Lynch, SBI Caps, HSBC,
Keynote and Aryaman Financial.

The regulator’s investigation has revealed major
lapses in the due diligence process relating to initial public offerings, rights
issues and also open offers, according to an official close to the development.
SEBI has set in motion adjudication proceedings for imposing a monetary penalty
against all these bankers, an official said.


He added that arbitration proceedings against Enam
and Kotak pertain to YES Bank and IDFC IPOs dating back to 2006. A SEBI probe
had revealed a scam involving manipulation of retail category in these IPOs. DSP
Merrill Lynch was also rapped by SEBI for the YES Bank IPO, as the regulator’s
inspection showed that the details of the promoters as mentioned in the IPO
document were different from those filed with the Reserve Bank of India.

HSBC and SBI Caps were charged with failure in
disclosing key details in open offers managed by them. In some cases, the
regulator has found 10-15 lapses in the offer documents, the official said. In
several cases, bankers have not followed the prescribed procedures while
conducting due diligence, said SEBI officials. SEBI Chairman C. B. Bhave had
told ET, in an interview shortly after taking over, that one of the issues SEBI
was actively looking at was to make merchant bankers more responsible,
post-issue.

In some cases, the merchant bankers had not even
verified the plant and machinery of the companies, the issues of which they had
managed. Besides, litigation against the company directors was not mentioned in
the public issue documents. Errors were also noticed in financial details
provided in the documents.

SEBI’s inspection also found serious deficiencies
in some IPOs. For instance, in one IPO, the regulator found out that the
post-issue capital of the company was higher than its authorised capital — a
clear indication of poor due diligence carried out by the issue’s merchant
banker. The same mistake was found in Weal Infotech IPO’s case and the regulator
has pulled up the merchant banker to the issue, Aryaman Financial.

SEBI has taken a grim view of the fact that
merchant bankers, who are entrusted with the task of vetting a public issue,
have failed to discharge their responsibilities fully, which is detrimental to
the interest of investors. Five of the merchant banks who were served notice by
SEBI declined to comment on the issue when ET contacted them. Keynote Financial
said it had not received any notice from the regulator. Officials of Aryaman
Financial were not available for comment.

It is not only in IPOs that serious lapses on the
part of merchant bankers were detected. Even in case of open offers, SEBI has
indicted merchant bankers. The market watchdog has taken HSBC to task on the
Garware Offshore open offer. In this instance, SEBI found out that the open
offer document did not furnish important details of the target company. The
offer was made by India Star Mauritius and the financial details of the
acquiring company were not given in the offer document.

Even the company’s paid-up capital was wrongly
mentioned in the financial data, officials said. SEBI has prescribed a standard
letter of offer containing various financial and other parameters of the
company. In fact, HSBC was given a warning by the regulator in an earlier case.

SEBI has moved against SBI Caps for the investment
bank’s failure to provide a vital piece of information about a company in the
open offer document. The open offer was made by a company listed on a regional
stock exchange, but the document did not mention the fact that the company would
soon list on BSE. Many investors tendered their shares in the offer, since they
did not possess the requisite information.

(Source : The Economic Times, 12-8-2008)

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Non-resident tax updates: Non-residents can work on Indian projects only on employment visa; business visa norms to be tightened

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50
Non-resident tax updates: Non-residents can work on Indian projects only on
employment visa; business visa norms to be tightened


In the present liberalized economic environment, Indian
companies are awarding work for execution of projects/contracts to foreign
companies, including the Chinese. This has resulted in inflow of foreign
nationals, including the Chinese, for execution of projects/contracts in several
sectors e.g. steel, power etc. It has come to the notice of the government that
a large number of foreign nationals, including Chinese were coming for execution
of projects/contracts to India on business visas instead of employment visas.

The matter has, therefore, been reviewed by the government
and it has been decided that henceforth a business visa will be issued only to
bona fide foreign businessmen who want to visit India to establish an
industrial/business venture or to explore possibilities to set up an
industrial/business venture in India or who want to purchase/sell industrial or
commercial products or consumer durables, etc., according to provisions of the
official visa manual.

It has also been decided that all foreign nationals coming
for execution of projects/contracts to India, will have to come only on an
employment visa. And that such visa will be granted only to skilled and
qualified professionals appointed at a senior level, skilled position such as
technical expert, senior executive or in a managerial position, etc., and will
not be granted for jobs for which a large number of qualified Indians are
available. Suitable instructions/guidelines have been issued to the Indian
missions abroad to effectively regulate employment and business visa regimes and
ensure that these are issued strictly as per the prescribed norms.

As per the guidelines issued by the government, employment
visas for foreign personnel coming to India for execution of projects/ contracts
may be granted by Indian missions to highly skilled personnel and professionals,
to the extent of 1% of the total persons employed on the project and subject to
a maximum of 20. However, this has been raised to 1% or maximum of 40 for the
power and steel sector projects till June 2010. In case more foreign nationals
are required for any project, then a clearance from the Ministry of Labour &
Employment is required.

(Source: Internet & Media Reports, dated 04.01.2010)

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Introduction of the UTN, which tax payers need to quote along with PAN, shelved

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49
Introduction of the UTN, which tax payers need to quote along with PAN, shelved


The government has decided to shelve the introduction of the
Unique Transaction Number (UTN) which tax payers need to quote along with
Permanent Account Number (PAN), when tax is deducted/collected at source. The
scheme was to come into force from the New Year.

(Source:
Internet & Media Reports, dated 31.12.2009)


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Declaration of Assets by SC Judges under RTI Act -Supreme Court should accept verdict

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Declaration of Assets by SC Judges under RTI Act -Supreme Court should accept
verdict


The ruling by a three-member bench of the Delhi High Court is
truly historic. It upheld an earlier judgment of a single judge of the same
court, dismissing an appeal by the Supreme Court (SC) that the office of the
Chief Justice of India (CJI) comes within the ambit of the Right to Information
(RTI) Act. Doing so, the High Court has sent a clear message: No one is above
the law.

This is the most sacred principle in any democratic society
and it is heartening that the High Court sees no case as an exception. The prime
minister and the president are already covered by the RTI Act; so why not the
apex court judges? The ruling comes in a dispute over whether assets declared by
SC judges to the CJI should be disclosed under the RTI Act.

“The higher the judge is placed in the judicial hierarchy,
the greater the standard of accountability and the stricter the scrutiny of
accountability of such mechanism,” said the bench. We could not agree more.

(Source: The Economic Times, dated 14.01.2010)

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Late or dozing in court? Judges may be in dock

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Late or dozing in court? Judges may be in dock


Schoolchildren who resent being penalised for coming in late
or for falling asleep in the class can take heart. Hopefully, from the next
year, even the Supreme Court and High Court judges will be in serious trouble if
they come late to court or nod off during arguments. Indeed, they can face
inquiry and risk incurring punishment stretching from censure to removal.

These are among the high standards and accountability
criteria proposed for judges of the higher judiciary in the new Judicial
Standards and Accountability Bill, 2009, which, after undergoing 18 drafts, is
ready to go before the cabinet in a day or two, law ministry sources told TOI.
Courts have not been immune to the problem of lack of punctuality, seen by many
as a national trait because of its spread across regions, demographics and
institutions. The late “latifs” among SC and HC judges have so far got away
because of the absence of any mechanism to chastise these holders of
constitutional posts. The government now seems keen to wean them off their
fondness for Indian Standard Time — a euphemism used to describe the cultural
problem that sees punctuality as alien to desi ethos. 5-yr jail is likely for
bid to frame judge

The new Judicial Standards and Accountability Bill, 2009, a
brainchild of the law minister Veerappa Moily, and drafted and re-drafted with
assistance from the Attorney General G E Vahanvati and Solicitor General Gopal
Subramaniam, has a provision that will surely make the judges of the higher
judiciary sit up and take notice—”punctuality and devotion towards duty’’.

Anyone who finds a judge not punctual or not devoted to duty,
dozing off once too often during hearings or being habitually late in delivering
judgments, could lodge a complaint against that judge with an Oversight
Committee, specifically provided to receive such complaints.

The committee would thoroughly scrutinise the complaint and
its veracity. If the complaint was found to be false, the complainant would be
proceeded against and could end up behind bars for up to five years.

Apart from making voluntary asset declaration by judges,
according to the apex judiciary’s resolution of May 7, 1997 a statutory
requirement, the bill gives a wider meaning to assets and liabilities.

(Source: Internet & Media Reports, dated 12.01.2010)

(Note: What about similar accountability bill for our
law makers who are passing legislation without debate and discussion in the
Parliament? Why are they not made accountable?)

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Court backlog must be cut, but a cess isn’t the solution

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Court backlog must be cut, but a cess isn’t the solution


The law ministry is considering a cess to help clear the
three crore cases clogging the courts. Though the proposal is only at a
discussion stage, it must be nipped in the bud. We’ve already had an education
cess and it is unclear how much of this has reached the real beneficiaries and
if it has led to any perceptible improvement.

Obviously the ever-increasing pile-up of cases in our courts
is a major cause for concern. Of the three crore cases pending in the courts,
roughly 2.5 crore are in lower courts, 40 lakh in the high courts and around
52,000 in the Supreme Court. The backlog has not only paralysed delivery of
justice but also exacted a high economic cost. Finance minister Pranab Mukherjee
recently said that delays in the courtroom were having an adverse impact on the
country’s GDP. This is mainly because of the inordinately long time taken to
enforce a contract in India.

Among the other proposals include the filling up of vacancies
in courts quickly. It has been suggested that some 15,000 judges be appointed in
trial courts for a two-year term who will work in three shifts. There are other
proposals that could also be considered. Retired judges could be drafted to help
tackle the shortage of personnel; the long vacation for judges, a holdover from
colonial times, should be reduced; out-of-court settlements should be
encouraged; and there should be better pay for judges to attract the best talent
from among the legal profession. The Law Commission has also rightly suggested
that adjournments be resorted to only if absolutely necessary.

(Source: The Times of India, dated 30.12.2009)

(Note: The government is the biggest litigant. The
officials in all departments issue Show Cause Notices / Penalty Notices, even
for minor or technical infractions of law and file appeal against judicial
orders as a routine, without application of mind. There is no accountability on
the part of litigant officials. Litigation is used as a means to harass the
citizens and extract a price. The judiciary has commented upon this time and
again but to no avail. If frivolous litigation by the government stops, the
problem of backlogs would be sold substantially.)

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Corporate governance cannot be mandated: Irani

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45
Corporate governance cannot be mandated: Irani


Tata Sons Ltd Director Jamshed Irani has said that corporate
governance is a culture that cannot be mandated, but has to be built up
gradually with strong link between the board and the management of the company.

Delivering a lecture on ‘’Corporate governance through the
lens of an Indian corporate’’ here last night, Mr Irani said corporate
governance has become a major cause of concern following the Satyam scam. He
believes that frequency of financial reporting is not so important, but accuracy
and efficiency of the same is more crucial to ensure quality governance.

Asserting that with change in business environment ‘’we
should also change the way we look at the governance and also our mindset,’’ Mr
Irani said corporate governance and financial governance are two main parts of
the governance.

As far as corporate governance is concerned, he said,
provisions like clause 49 can make some difference, but if the Chief Executive
Officer or Chief Financial Officer is determined to do something wrong, no one
can stop him.

‘’But when it comes to punishment, certainty is more crucial
than its severity. Hopefully, the new law will also bring in transparency and
proper disclosure norms, which will ultimately lead to desired accountability in
the entire system,’’ he said.

[UNI, January 9 2010]

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ASIC cracks down on auditors

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ASIC cracks down on auditors


ASIC has accepted enforceable undertakings from two partners
of accounting firm Moore Stephens Sydney after an investigation found that
audits they had conducted were inadequate.

The enforceable undertakings provide that Christopher
Chandran and Scott Whiddett must not practice as registered auditors for 12
months.

They must both participate in an additional 15 hours of
continuing professional audit-related education during that 12 month period and
have their next five audits following the 12 month period reviewed by an ASIC
approved registered auditor.

An ASIC investigation found that an audit of Estate Property
Group for the financial year ended 30 June 2006 conducted by Chandran was
inadequate, and that as lead auditor he failed to ensure the audit complied with
Australian Auditing Standards as required by the Corporations Act 2001.

[www.moneymangement.com.au 11 January, 2010]

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Music helps lower cholesterol

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42. Music helps lower cholesterol


Doctors have found that prescribing music can improve heart
health and lower cholesterol levels. Their research found that if a patient
listens to 30 minutes a day of their favourite music, it can go far beyond
simply relaxing them mentally — it benefits them physically by expanding and
clearing blood vessels. Doctors have tried the method on some patients in
America and it has been welcomed by British experts. It is believed to work by
triggering the release into the bloodstream of nitric oxide, which helps prevent
the build-up of blood clots and harmful cholesterol.

The findings are part of a growing body of research into the
effects of music on the human body. Scientists have found that songs can improve
endurance, while 18th century symphonies can improve mental focus.

When it comes to the effect on the bloodstream, however, the
key is not the type of music, but what the listener prefers. The same is true of
volume and tempo. “The music effect only lasts in the bloodstream for a few
seconds, but the accumulative benefit of favourite tunes lasts and can be very
positive in people of all ages,” said Michael Miller, Director of the Center for
Preventive Cardiology at Maryland University, who carried out the research. He
added : “We were looking for cheaper, non-pharmacological aids to help us
improve our patients’ heart health, and we think this is the prescription.”

The Maryland study, based on healthy non-smoking men and
women with an average age of 36, found the diameter of blood vessels in the
upper arm expanded by 26% in volunteers listening to music they found enjoyable.

Miller said blood vessel expansion indicated that nitric
oxide is being released throughout the body, reducing clots and LDL, a form of
cholesterol linked to heart attacks. He also warned that listening to stressful
music can shrink blood vessels by 6% — the same effect, according to previous
studies, as eating a large hamburger.

(Source : The Times of India, dated 23-12-2008)

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One in four company accounts flagged by auditors

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One in four company accounts flagged by auditors


One in four financial statements lodged by Australian listed
companies were flagged by auditors in the past year, as the global financial
crisis cast doubt on asset values and the ability of companies to refinance
debt.

According to figures provided by the Australian Securities
Exchange, 25 per cent of the 967 financial statements lodged up to June 30 —
those of 239 companies — contained a modified independent audit report, with
most related to whether the company would continue to operate as a ‘’going
concern’’. The figures exclude junior mining companies.

A modified audit report means the auditor has decided to
include information not contained in a standard report. Most audit modifications
are likely to involve an ‘’emphasis of matter’’ paragraph, which highlights
potential problems that may affect a company’s status as a going concern — its
ability to pay debts and continue operating. A ‘’qualified opinion’’ is a more
serious modification.

[Sydney Morning Herald, January 11, 2010]

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Pay Rs.10k for wrong info in Govt. survey

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41. Pay Rs.10k for wrong info in Govt. survey


You may soon have to give authentic socio-economic data
sought by the Government. And if you don’t, you may be fined.

The Rajya Sabha passed an important legislation making it
mandatory for citizens and commercial establishments to part with accurate
information during the annual survey. Accordingly, every individual in the
country and private establishment will have to share desired information with a
designated statistical officer, else they will have to pay penalty which may, in
certain cases, extend up to Rs.10,000.

The Collection of Statistics Bill — introduced in the RS in
2007 — also provides for empowering the Centre to make rules to avoid
duplication and to maintain technical standard in data collection, which is
currently lacking during the annual survey in the absence of any legal backing.

Before pressing the House to pass the Bill, Union Minister
for Statistics and Programme Implementation G. K. Vasan said : “The new law will
have elaborate provisions to ensure that the information collected will not be
used for any purpose other than for statistical purpose. Identities of
individuals or companies will not be revealed to anyone during use/transfer of
such data within Government agencies which may need it for policy making.”

As against the existing law which only facilitates collection
of statistics of certain kinds relating to industries, trade and commerce, the
new law will empower the Government to collect data on economic, demographic,
social, scientific and environmental aspects of individuals and households.
Though the Government has been collecting such data under the National Sample
Survey, it is done voluntarily.

Stating the purpose of such a legislation, Vasan said : “It
is felt that the provisions of the current law are not adequate to meet the new
challenges arising out of liberalisation and globalisation regime manifested by
the WTO agreement.”

The Bill also has the provision of empowering panchayats and
municipalities to collect statistics through due procedures. Once the new law
comes into force, the Government will appoint statistical officers for each
subject of data collection at the district and block levels.

(Source : The Times of India, dated 20-12-2008)

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CA certificates under I-T Dept scanner

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43 CA certificates under I-T Dept scanner

 After the Satyam scam, the role of chartered accountants (CAs)
has come into focus again. This time the Income Tax (I-T) Department has found
that CAs have given false certificates, enabling Non-Resident Indians (NRIs) and
foreign nationals to evade taxes in India. The government agency has informed
the Institute of Chartered Accountants of India (ICAI), which regulates the
chartered accounting profession in the country, of the fraud. ICAI has powers to
take disciplinary action against errant members. Calling the fraud ‘a massive
violation of the law’, the Central Board of Direct Taxes (CBDT) Member Saroj
Bala (in charge of revenue) said, “A large number of such payments are outright
tax deductible in India and taxable in India, but are not taxed because CAs have
certified them not taxable. The ‘CBDT’ administers all direct tax issues in the
country, but the tip-off on this method of tax evasion came from a CA. Under the
Income-tax Act, a CA certificate can be obtained saying no tax needs to be
deducted while remitting money overseas, after which the Reserve Bank of India
permits the transfer of money. Bala said the department receives numerous such
certificates involving ‘thousands of crore of rupees’. A firm estimate of
revenue loss is not yet available as investigations are still on. The payments
that are under the I-T Department’s scanner are interest on overseas loans,
payments for contractual work by foreign firms in India and capital gains from
sale of assets (similar to the Vodafone-Hutch transaction). For instance, if an
Indian firm borrows from a foreign bank, under normal circumstances tax will
have to be deducted on the subsequent interest payment. But no tax is payable if
a CA certifies that the overseas entity that receives the interest payment is
not a tax resident of India. The I-T Department’s investigations have found that
the non-tax residency is not necessarily the case. “Some verifications and
inspections of certificates have been carried out and many defaulters found. We
are contemplating action against this false certification by CAs,” Bala said.
Indian tax rules also require tax to be deducted on payments from any income
earned by a company that has a permanent establishment (PE) in India.
Verification of many such CA certificates revealed that the foreign recipients
had PEs in India, but escaped the tax net. Investigations found that both small
and large accountancy firms are into this practice. “Normally, many CAs do not
apply their mind. They issue the certificate and make money,” she said, adding
that when confronted, some CAs claimed they were not aware of the tax
provisions.

(Source : Business Standard, 2-2-2009)

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What do newly qualified accountants want

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9 What do newly qualified accountants want




1. Competitive salary

2. Enjoyable and interesting work

3. Opportunities for promotion

4. A lively and sociable working environment

5. A convenient location

6. Rarely having to work more than 40 hours a week

7. A good pension scheme

8. …

9. …

10. A reputed employer

10. Opportunities to work abroad

12. State-of-the-art offices

(Source : AccountancyMagazine.com, January 2008)

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Meditate your way to a bigger brain

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  1. Meditate your way to a bigger brain

Push-ups, crunches and gyms are fine for building bigger
muscles and stronger bones. But can you meditate your way to a bigger brain ?

The answer is yes, as a new study has established that
certain regions in the brains of those meditating long term were larger than
in a similar group.

A group of researchers at the University of California Los
Angeles (UCLA), used high-resolution magnetic resonance imaging (MRI) to scan
the brains of people who meditate. Specifically, such people showed
significantly larger volumes of the hippocampus and areas within the orbito-frontal
cortex, the thalamus and the inferior temporal gyrus-regions known for
regulating emotions. “We know that people who consistently meditate have a
singular ability to cultivate positive emotions, retain emotional stability
and engage in mindful behaviour”, said Eileen Luders, study co-author and
postdoctoral fellow at the UCLA Lab of Neuro Imaging.

Luders and colleagues examined 44 people, 22 control
subjects and 22 who had practised Zazen, Samatha and Vipassana meditation,
among others. They had devoted an average of 24 years to the practice. More
than half of all the people who meditate said that deep concentration was an
essential part of their practice, and most meditated bet. 10 and 90 minutes
daily, said an UCLA release.

The researchers used a high-resolution, three-dimensional
form of MRI and two different approaches to measure differences in brain
structure.

These findings were published in Neuro Image.

(Source : The Times of India, dated 14.05.2009)

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Accounting fiction

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  1. Accounting fiction

US banks have started reporting profits, even repaying some
of the funds given to them by the government. But, as Nobel Laureate Paul
Krugman points out, a bank’s profits aren’t really hard numbers, since a great
deal depends on how much money the bank sets aside to cover the possibility of
future losses. As Citigroup’s $1.6 billion first quarter profits show, there
is quite a lot of elbow room for massaging the numbers. Around $700 million of
the bank’s revenues came from selling off its remaining stake in the Brazilian
credit card firm, Redecard.

Another $250 million were released from reserves, and $110
million came from a tax rebate. But most important of all, and perhaps
shocking, was the $2.7 billion boost to revenues from an accounting rule that
allowed Citigroup to buy back its debt at a lower price. US Financial
Accounting Standard 159 says that when a debt declines in value, banks have to
assume they bought the debt back and retired it. Since the notional buyback is
at less than sticker price, the bank has now made money on the deal !

Then there is the case of Bank of America, whose net income
rose to $4.25 billion in the January-March quarter, from $1.21 billion a year
earlier, only to find its stock price fall by a staggering 24 per cent. That
is because investors realised that out of the total increase, $1.9 billion
came from the bank’s sale of its stake in China Construction Bank, while
another $2.2 billion came from the fact that some of the Merrill Lynch debt
fell in value (long live FAS 159 !). Similarly, as Dr. Krugman points out,
Goldman Sachs changed its definition of a quarter so that (in Dr Krugman’s
words), “the month of December, which happened to be a bad one for the bank,
disappeared from this comparison”. JPMorgan Chase has also reported better
numbers, using FAS 159.

(Source : Business Standard, dated 23.04.2009)

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Accountants finally get a hearing aid for appeals

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  1. Accountants finally get a
    hearing aid for appeals


Tribunal, instead of Courts, to review regulatory decisions

Chartered accountants, company secretaries and cost
accountants facing disciplinary action from their professional regulators can
now appeal to a specialised Appellate Tribunal instead of a High Court.

The appeals will be heard by professionals who have
regulatory experience and can deliver speedy decisions, an official in the
Ministry of Corporate Affairs said. The delay at the heavily burdened High
Courts often hurts the careers of many professionals who seek a review of the
disciplinary action.

(Source : The Economic Times, dated 23-4-2009)


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One of the best mails ever . . . .

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32 One of the best mails ever . . . .

Speech by Thomas Friedman in the New York Times . . . .

“When we were young kids growing up in America, we were told
to eat our vegetables at dinner and not leave them.

 

Mothers said, think of the starving children in India and
finish the dinner.’

 

And now I tell my children

 

‘Finish your homework. Think of the children in India who will make you
starve, if you don’t.”

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Perspectives

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30 Perspectives


 


  •  “You offend God not only by stealing, blaspheming or coveting your neighbor’s
    wife, but also by ruining the environment.”

Vatican Bishop
Gianfranco Girroti, on the Roman Catholic Church’s new list of seven deadly
sins for the modern age, which include eco-abuse,

obscene
consumerism and genetic manipulation.

  •  “I didn’t know the Army had anything left to sell. I thought it had all been
    stolen long ago.”

An
unidentified Russian Army Officer, commenting on the military’s plan to raise
money by auctioning off

mansions, land
and even whole towns in its possession.

(Source :
Newsweek , 24-3-2008)

 

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SEC Advisory Committee takes up fair value accounting, drops discussion of IFRS

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28 SEC Advisory Committee takes up fair
value accounting, drops discussion of IFRS


The jury is still out on the absolute merits of fair value
accounting for financial statements, a variety of experts told the Securities
and Exchange Commission’s Advisory Committee on Improvements to Financial
Reporting in an open meeting on May 2, 2008, in Chicago.

 

“What are users most interested in ?” said one of the
participants. “Then there’s the issue of what’s doable. I think we’re finding
with [the Financial Accounting Standards Board’s (FASB) Statement of Financial
Accounting Standards (SFAS) No. 157, Fair Value Measurements] it’s challenging
for financial statements.”

 

The sub-committee’s report cautions against expanding the use
of fair value in financial reporting until a number of issues are better
understood and resolved, including the FASB’s project on the measurement
framework, which is looking at developing a consistent approach to determine
which measurement attribute should apply to different types of business
activities.

 

“What we have proposed is a framework not based on any one
asset, we’ve based it on activities,” said Susan Schmidt Bies, the Chair of
CIFR’s Substantive Complexity Subcommittee and a member of the Federal Reserve
Board from December 2001 through March 2007. “We think that’s what users want,
and it’s more based on what businesses do, because it asks what is the cash flow
recognised in the financial statement and how is that related to what’s going on
in the income statement.”

 

The sub-committee report says the SEC should recommend that
the FASB “be judicious in issuing new standards and interpretations that expand
the use of fair value in areas where it is not already required, until
completion of a measurement framework.”

(Source : Internet Newswires, 6-5-2008)

 

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Improve methodology for ranking ease of paying taxes

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27 Improve methodology for ranking ease of
paying taxes


The Chairman of the Prime Minister’s Economic Advisory
Council, Dr. C. Rangarajan, has taken issue with the World Bank over the
methodology used in the latter’s ‘Paying Taxes 2008’ study, which ranked various
countries in terms of ease of paying taxes.

 

India was ranked 168 among 178 countries. The corresponding
rank for Pakistan was 146, Sri Lanka 158 and Bangladesh 81.

 

“We feel there are serious shortcomings in the methodology
used by the World Bank study in making these rankings. Besides the judgments
made in the choice of the firm, taking the number of tax payments and time spent
with tax payments is far too simplistic,” Dr. Rangarajan said in his address at
the Fifth Asia Tax Forum, jointly organised by the Union Finance Ministry and
the National Institute of Public Finance and Policy here on Monday.

(Source : Internet newswires)

 

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Citigroup to lay off 9,000 as Q1 losses touch $ 5.1 billion

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25 Citigroup to lay off 9,000 as Q1 losses
touch $ 5.1 billion


Citigroup posted its second straight quarterly loss on
Friday, hurt by more than $ 16 billion of write-downs and costs related to
credit losses, and said it will cut another 9,000 jobs.

 

Though the $ 5.11 billion first-quarter loss was larger than
expected, analysts and investors expressed optimism that the largest US bank and
its new chief executive, Vikram Pandit, were taking necessary steps to move past
credit problems and drive down costs.

 



  •  Citigroup’s net loss pegged at $ 1.02 a share


  • Revenue has fallen 48% to $ 13.22 billion


  •  Citi has lost close to $ 15 billion in the last two quarters in asset
    writedowns


  • Bank has written down over $ 46 billion since the subprime lending crisis
    erupted mid-2007


  • Investment bank business has suffered the brunt of write-downs.

 


In the last two weeks, Citigroup has said it was selling its
Diners Club International credit card network and most of its North American
commercial lending and leasing business. Expenses, meanwhile, fell 2% from the
fourth quarter.

(Source : The Economic Times, 19-4-2008)

 

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Derivative blow : Axis makes Rs.72 crore provisions

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26 Derivative blow : Axis makes Rs.72 crore
provisions


Axis Bank today said it has made provisions of Rs.71.97 crore
during the fourth quarter of 2007-08 for six foreign exchange derivatives
transactions that have been repudiated by two of its customers.


While the bank has 188 derivatives transactions with an
aggregate mark-to-market (MTM) loss of Rs.673.55 crore at the end of March 2008,
there are six transactions where companies are not willing to honour the
contract. Of the 188 deals, 113 are outstanding transactions dealing in foreign
exchange derivatives where the aggregate MTM loss is Rs.547.72 crore.


While a host of banks, a majority of which are new-generation
private players, have sold derivatives products, Axis Bank is the first to
disclose the details of such transactions, some of which involved cross-currency
options and swaps.

The private sector bank did not disclose the identity of the
two companies that have gone to Court, but it is widely known that these are
Rajshree Sugars & Chemicals and Nahar Industries. The bank pointed out that the
outstanding contracts have not turned non-performing assets and involve MTM
losses. Reserve Bank of India guidelines require banks to treat assets as NPAs
90 days after default. ‘None of these assets has turned into an NPA,’ the bank
said in a statement.

The Reserve Bank of India (RBI) has initiated talks with
accounting standards regulator Institute of Chartered Accountants of India (ICAI)
to advance the mandatory implementation of accounting standards for derivatives
transactions by Indian banks and companies from its present 2011 deadline.

(Source : Business Standard, 22-4-2008)

 

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Commodity crash

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24 Commodity crash


The sudden price crash in global commodities markets last
week, after they had peaked at all-time highs at the start of the month, took
most observers by surprise. The shock value was all the more because it was the
steepest weekly drop in 50 years, exceeding by a substantial measure the
previous record weekly slump of 9.2%, way back in December 1980. That drop had
been triggered chiefly by a 20% hike in interest rates by US banks on
instructions from the Federal Reserve, which wanted to tame rampant inflation.
The present cave-in is also remarkable in that it has cut across the gold, crude
oil, metals and agro commodities markets, including corn, wheat and vegetable
oils.

(Source : Business Standard, 25-3-2008)

 

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Neta-builder nexus will sell Mumbai : Maharashtra CM

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51 Neta-builder nexus will sell
Mumbai : Maharashtra CM


Maharashtra chief minister
Prithviraj Chavan said that there was a “dirty nexus among government officials,
politicians and builders in Mumbai,” and that these forces have the intention to
‘sell’ the city.

(Source : Times of India, dated 10-1-2011)

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Inflation and reforms — You can’t fight inflation by dithering on reform

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49 Inflation and reforms —
You can’t fight inflation by dithering on reform


The common man’s headache
just got bigger. Food inflation spiked to 18.32% for the week ended December 25.
Worse, non-food prices seem northbound as well, including for petrol and
consumer durables. Borrowing costs too are up. Fears about the double whammy of
price rise and possible RBI rate hikes made the sensex nosedive last week, FIIs
exiting massively on the assumption of dented corporate earnings. Balancing the
persisting need to push growth with concerns on generalised inflation, RBI and
the government will have to take a tough call soon on more aggressive hardening
of monetary and fiscal policy, as IMF suggests.

(Source : Times of India, dated 10-1-2011)

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Why food is costlier

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50 Why food is costlier


Twenty years ago, a Maruti
800, with an air-conditioner fitted, cost a little less than Rs.2 lakh. Today it
costs about Rs.2.5 lakh. Twenty years ago, a branded 1.5 tonne window
air-conditioner cost about Rs.30,000; today, you can get a split AC unit for
that price. Then, Videocon was offering large refrigerators for more than
Rs.30,000; you can get better units today for much less. TV prices have crashed
too, and one can go on with this list. In a period when salaries in the
corporate sector have gone up by about 15% annually, and inflation-adjusted per
capita income has roughly trebled, consumer durables of virtually every hue have
become infinitely more affordable.

Why has that not happened
with onions ? In 1980, Indira Gandhi swept back to power on the back of an
election campaign that talked of onions costing the then stratospheric sum of
Rs.5 per kg. Now it is Rs.70. Home-grown apples (not the ones from Down Under)
cost over Rs.100 in Delhi, and lentils of various sorts have also hit
triple-digits. These price increases far outdo income increases, rapid though
they have been for most people, and it is simply not enough to seek palliatives
in short-term measures like raising interest rates. Nor is it enough to say that
there has been demand growth for proteins because of higher incomes. There has
been comparable demand growth for eggs, but they have not seen similar price
inflation. Nor is it good enough to argue that there are global shortages in
commodities — both cyclical (as in sugar) and structural (lentils).

The truth is that we face
inflation in agricultural products, on a scale that we don’t see in manufactured
products, because agriculture has not been reformed, whereas industry has. There
is talk of collusion in onion prices — which raises the question of reforming
trade. Everyone knows that the difference between farmgate and retail prices is
unusually high in India, in part because of multiple intermediaries. But the
country has not been able to benefit from supply chain efficiencies because
organised retail has not been allowed to grow, and to link producer and consumer
prices more closely by squeezing out middlemen. Politicians who for two decades
have opposed reforms in both agriculture and trade will be loath to own up
responsibility for today’s food price inflation; they should know that the
situation will get worse if reforms are not introduced even at this late stage.

The prime minister should do
for agriculture and domestic trade what he did for industry and export trade 20
years ago.

(Source : Business Standard, dated 8-1-2011)

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Visa, MasterCard business model threatened

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48 Visa, MasterCard business
model threatened


Visa Inc and MasterCard Inc
may face permanent damage to the fastest-growing part of their business after
the US Federal Reserve proposed rules that could cut debit-card transaction fees
by 90%.

The Fed proposed capping
so-called interchange fees at 12% each. Currently, the networks charge merchants
an average of 1% of the purchase price, regardless of cost, and pass that money
along to card-issuing banks.

The change, if approved by
the Fed after a public comment period, would wipe out most of an estimated $ 15
billion in annual revenue for US lenders that issue Visa and MasterCard debit
cards, including Bank of America, JPMorgan Chase & Co and Wells Fargo & Co.

(Source : Business Standard, dated 18-12-2010)

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Other banks in firing line

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47 Other banks in firing line :


The Deutsche Bank settlement
is part of a wider US drive to crack down on banks that help wealthy Americans
evade taxes and could herald similar settlements with other banks.

(Source : Business
Standard, dated 23-12-2010)

(Comment : What are
the authorities in India doing ? What is the outcome ?)

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