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Australia plans road safety practices on ECR

The Australian Trade Commission is planning to pilot its road safety and traffic enforcement practices on the East Coast Road (ECR) between Chennai and Puducherry. Michael Carter, Trade Commissioner and Consul Commercial, Australian Trade Commission, told The Hindu that representatives of the Commission are planning to meet senior government officials to work in tandem and improve road safety in the State. S. Rajendran, ADGP, State traffic planning cell, said the Australian officials wanted a stretch where they could implement some road safety technology and practices. “The ECR is ideal as it witnesses over 7,000 accidents annually,” says Mr. Rajendran. He said the State could adopt and implement the road design, signage and trauma care followed in Australia. “One of the technologies that can be adopted is the installation of cameras along the ECR. The policemen can detect drunk drivers by monitoring the screen. They will not have to stop every vehicle and ask them to blow,” Mr. Rajendran suggests. Mr. Carter said ‘booze bus’ is one of the enforcement methods used in Australia to curb drunk driving. “The bus will have all equipment to test for alcohol in blood and it will be parked on the stretch where the surprise check will be conducted. The driver can be tested on the spot instead of taking him to the hospital,” he said. He said by adopting all these measures, Australia was able to reduce road fatalities by 83 per cent in the last 40 years. “The State police can also tie up with Australian enforcement agencies and work together to ensure that Tamil Nadu becomes a role model for road safety,” he added.

Ford to phase out Fusion with launch of Figo

With the forthcoming launch of its small car Figo, US car maker Ford today said it will be phasing out its hatchback Fusion from the Indian market.

"We will discontinue the Fusion and our focus in the small car segment will be exclusively on Figo in the Indian market. The Fusion was also giving us a relatively small volume and we hope to do good with the Figo," Ford India Managing Director and President Michael Boneham told reporters here.

The company will be launching the Figo in March and commercial production of the vehicle has started at the Ford India's Chennai plant from February 5.

Know all about Section 80C of IT Act

What is Section 80C

In order to encourage savings, the government gives tax breaks on certain financial products under Section 80C of the Income Tax Act.

Investments made under such schemes are referred to as 80C investments. Under this section, you can invest a maximum of Rs l lakh and if you are in the highest tax bracket of 30%, you save a tax of Rs 30,000. The various investment options under this section include:

Provident Fund & Voluntary Provident Fund

Provident Fund is deducted directly from your salary by your employer. The deducted amount goes into a retirement account along with your employer’s contribution.

While employer’s contribution is exempt from tax, your contribution (i.e., employee’s contribution) is counted towards section 80C investments. You can also contribute additional amount through voluntary contributions (VPF). The current rate of interest is 8.5% per annum and interest earned is tax-free .

Public Provident Fund

An account can be opened with a nationalised bank or Post office. The current rate of interest is 8%, which is tax-free and the maturity period is 15 years. The minimum amount of contribution is Rs 500 and the maximum is Rs 70,000.

National Savings Certificate

These are 6-year small-savings instrument, where the rate of interest is 8% and is compounded half-yearly . The interest accrued every year is liable to tax but the interest is also deemed to be reinvested and thus eligible for section 80C deduction.

Equity-Linked Savings Scheme

Mutual funds offer you specially-created tax saving funds called ELSS. These schemes invest your money in equities and hence, return is not guaranteed. Money invested here is locked for a period of three years.

Life Insurance Premiums

Any amount that you pay towards life insurance premium for yourself, your spouse or your children can be included in section 80C deduction.

If you are paying premium for more than one insurance policy, all the premiums can be included. Besides this, investments in unit-linked insurance plans (ULIPs) that offer life insurance with benefits of equity investments are also eligible for deduction under Section 80C.

Home Loan Principal Repayment

Your EMI consists of two components, namely principal and interest. The principal component of the EMI qualifies for deduction under Section 80C.

Stamp Duty and Registration Charges For Home

The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C.

However, this can be done only in the year in the year of purchase of the house.

Five-Year Bank Dixed deposits

Tax-saving fixed deposits (FDs) of scheduled banks with a tenure of five years are also entitled for section 80C deduction.

Others

Apart from the above, things like children’s education expenses that can be claimed as deductions under Section 80C. However, you need receipts to claim the same.

Nissan to roll out 1st car from Chennai Unit in May

The Japanese automaker Nissan Motor India today said the first car from its Chennai plant will be rolled out in May.

"Nissan is very serious on the plans in India. We are well on track to roll out the first car from our Oragadam plant (near here) in May," Nissan Motor India Chairman and Managing Director Kuminobu Tokuyama told reporters here.

Nissan is setting up the manufacturing facility in collaboration with Renault and the new cars will have 85 per cent local content, he added.

The Oragadam facility, a 50:50 joint venture between Nissan and Renault, will initially manufacture 2 lakh cars and will be scaled up to 4 lakh units by 2012.

"We are even accelerating our India plans," he said, adding the inauguration of the facility will take place in March while the first car roll-out will happen in May."

Tokuyama was here to officially unveil the company's eighth dealership outlet Sheriff Nissan in the country. The company has plans to take the number of its outlets to 30 this fiscal and 55 in the next two years.

Nissan hopes to garner 5 per cent of market share in the car market by 2012, Tokuyama said.

Renault Nissan Automotive India Managing Director Akira Sakurai said they have already recruited 1,500 employees and given them training. "We are going well on schedule and almost ready to start production at the plant,"
he said.

Kalanithi Maran to buy fledgling airline

Billionaire media baron Kalanithi Maran is close to sealing a deal to acquire Star

Aviation for over Rs 1,000 crore, launching himself into a struggling industry by buying an airline that is yet to start operations.

Mr Maran, who runs the Sun Network with interests in television, radio and newspapers, is buying the regional carrier in his personal capacity, persons close to the development said. Other terms of the deal and how it will be funded are not known.

Top executives of Star Aviation and Sun Network maintained that no such deal has been finalised. Mr Maran, the son of late Union minister Murasoli Maran and the grand nephew of Tamil Nadu chief minister M Karunanidhi, could not be reached. The 43-year-old is ranked 601 in the Forbes’ list of billionaires, with a net worth of $1.2 billion.

Star Aviation is owned by a Dubai-based NRI, Syed Mohammad, who owns a business empire estimated to be worth $3.8 billion, including an aircraft leasing company. Star Aviation’s imminent sale comes in the backdrop of its delayed launch because of a challenging economic environment. The airline industry has been especially hard hit and trade group IATA estimates that Indian carriers will post a combined loss of $1.5 billion (Rs 7,500 crore) in 2009.

Star Aviation, which was scheduled to launch its services early this year, now plans to do so in January or February 2010, a company official said on condition of anonymity. The airline has placed orders for seven E170 aircraft from Brazil’s and two have been delivered so far, he added.

Kapil Kaul of the Centre for Asia Pacific Aviation said that if the deal materialises, it is “very good news for Star Aviation’s promoters.”

“The Maran family have access to huge resources and sustaining power; they can bring capital to fully fund the project. But most important is having a professional management as well the choice of aircraft,” he observed.

Star Aviation, the first carrier to get an approval to operate a regional airline in the southern part of the country, has asked the government for time up to June 2010 to launch its services after missing a previous deadline. “As the first airline, Star will have the first mover advantage and it could also benefit of operating from the less crowded airports in the South. The entry of regional carriers will also enhance connectivity to the underserved Tier II and Tier III cities,” said an aviation analyst on condition of anonymity.

Sun Network, which owns the Sun TV channel, Suryan FM radio stations and the Dinakaran daily, has a licence as non-scheduled airline operator for chartered flights and air taxi services under the name Global Express. Two years ago, the company won shareholder approval to operate commercial flights.

It is also learnt that a company by the name “Sun Aviation” has been incorporated with the Registrar of Companies in Chennai, with Mr Maran as the founder.

ET had reported in August that Star Aviation and Sun Network were in talks for 50:50 joint venture, but both companies denied the development. In recent weeks, Star Aviation has again been in the news, with Mr Maran and Paramount Airways seen as the likely buyers.

Car buyers now face longer waiting periods

Manufacturers report unexpected post-festival surge in demand.

The bad old days of waiting periods for cars seem to have returned, with manufacturers reporting an unexpected surge in post-Diwali sales, forcing customers to wait a month to as much as four months for almost all models from the Swift to the Honda City.

Maruti Suzuki’s newly-launched hatchback, Ritz, reportedly has a waiting period of over two months, while buyers will have to wait for up to four months for the upper-range Honda City models. The average waiting period for the car is six to eight weeks.

What has come as a pleasant surprise to car makers is that the queues haven't shortened even a month after the festive period.

Pawan Goenka, president (automotive sector), Mahindra & Mahindra (M&M), said, “We are running our plants to full capacity, which is unusual during this time of the year. November-December demand is much stronger than usual.”

According to Goenka, the Xylo (a multi utility vehicle), Scorpio (a sports utility vehicle) and the Bolero (an MUV) have an average waiting period of two to three weeks. M&M is India's largest manufacturer of utility vehicles.

Similarly, Korean car brand Hyundai Motors has reported a sustained demand boom for its flagship models, i10 and i20, after Diwali.

Arvind Saxena, senior vice-president (marketing and sales), Hyundai Motor India, said, “Retail demand now is at least 20 to 25 per cent more than last November.”

Auto players said the sustained boom in car sales was a result of the pent-up demand in the earlier quarters, attractive interest rates on vehicle loans offered by banks, discounts and other financial benefits offered by the manufacturers and the general fear of a rise in both automobile prices and lending rates in the coming months.

Kotak Mahindra Prime, the car financing subsidiary of Kotak Mahindra Bank, raised vehicle interest rates 50 basis points a couple of weeks ago, but that hasn't impacted demand.

Sumit Bali, chief executive officer, Kotak Mahindra Prime, said, “The momentum in demand this year after the festivals has been well carried over. There is a strong growth momentum in vehicle off take. Interest rates are manageably lower and should not move upwards too much in the coming months. That’s a positive for the sector.”

The two-wheeler market isn’t far behind, with both Hero Honda and Bajaj Auto showing a waiting period after many years.

Anil Dua, senior vice president, marketing, sales and customer care, Hero Honda Motors, said the festival spirit was spilling over, as was evident from the surge in demand in November as well. “We had earlier said that we will sell four million units this year but now we are confidently saying we will cross that target handsomely.”

Dealers say the waiting period for diesel cars is “just going through the roof”. The Swift Dzire diesel model has a waiting period of over three months. The same is true for the diesel models of the Swift and Ritz.

Office rentals drop up to 37% in January-March

Office rentals declined up to 37 per cent in India during the first three months of the year due to sluggish demand, as business houses held back expansion plans to tide over the economic slowdown.

According to a study of eight Indian cities by global real estate consultant Cushman & Wakefield (C&W), supply in the cities outstripped absorption by 45 per cent in the January-March period of 2009.

Subsequently, drop in rentals in major business districts of the country ranged between three per cent and 37 per cent as compared to the previous three months.

For instance, at Lower Parel in Mumbai, office rentals fell by as much as 37 per cent in the first quarter of the current year, the study said.

Worli and Bandra Kurla Complex areas of the financial capital witnessed decrease of rentals by 29 per cent and 20 per cent respectively, it said.

"The first quarter of the year can be termed as the weakest so far in terms of commercial office take up across major cities in India as compared to a similar period for the last 2-3 years. Renegotiations and migration to more cost effective locations has been the norm for the cautiously advancing corporate sector," C&W Executive Director Kaustuv Roy said.

C&W said the National Capital Region (NCR) witnessed a fall in office rentals by up to 19 per cent during the first three months of 2009. Rentals at Connaught Place in the National Capital fell by 17 per cent largely due to occupants opting for more cost effective options.

The fall in office rentals was, however, the least at the Central Business District of Bangalore, which saw a decline of just three per cent.

All major markets moved towards an over supply situation mostly in response to plummeting demand from the key sectors such as BFSI (Banking, Financial Services and Insurance) and IT/ITeS, Roy said.

C&W pointed out that total fresh office space supply in Q1, 2009, across the eight cities was 11.5 million sq ft, which outstripped total absorption by over 45 per cent. Total absorption in the same period stood at 5.78 million sq ft and it was a decline of about 30 per cent over Q1, 2008.

While NCR and Mumbai witnessed fresh office space supply of 2.6 million sq ft and 2.47 million sq ft, respectively, absorptions in the two cities stood at 0.8 million sq ft and 0.9 sq ft respectively, the report said.

The consultant carried out their survey in Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, NCR and Pune.

Though supply levels in the market is expected to fall, C&W predicted rentals to remain under pressure in the coming few months as well.

"Going forward we are likely to see supply contraction. Acutely affected areas like IT/ITeS and certain corporate office destinations will see deferment of projects to bridge the gap between supply and demand.

"While rental values are expected to be under pressure in short to medium term, going forward lower rentals are likely to have a more positive impact on the absorption numbers," Roy said.

Tatas eyeing 10 lakh Nano bookings in two weeks

Tata Motors’ Nano, the world’s cheapest car, is poised for another milestone. The company is likely to book a whopping 10 lakh cars in the first fortnight starting March 23, company sources said.

The previous best in India was Fiat Uno, which did about 2.90 lakh bookings in 1995-96.

Simply put, this means a collection of Rs 7,000 crore in a span of two weeks as booking amount for each car will be around Rs 70,000.

All dealers of Tata Motors and select branches of State Bank of India (SBI) will accept bookings simultaneously across the country.

The first batch of cars will roll out from the Pantnagar plant in Uttarakhand, which has a capacity to produce only 3,000 cars per month. Situation will ease only after the company’s Sanand plant near Ahmedabad, which will have an initial capacity of producing 250,000 cars per annum, becomes operational in one year.

A survey by Crisil suggested that Nano’s launch could expand the Indian car market by 65 per cent. The increase in the market is expected to push up car sales by 20 per cent over previous year.

Allotment will be made through a draw and, going by projections even during this recession, those at the top of the draw would have the choice of becoming proud owners of the first Nanos, or getting a premium in the black market.

Govt estimates 500,000 job losses in textile industry

The estimate is less than industry’s estimate by half.

The Union textile ministry estimates that between 300,000 and 500,000 people will lose their jobs in this labour-intensive sector by March 31, due to the ongoing global economic downturn.

The government’s estimate is well below the projections of industry lobby groups, which put the number at around 1 million.

The textiles and garments industry is the second-largest employer in India after agriculture. It directly employs 35 million people and indirectly provides livelihood to about 88 million people.

“According to a survey carried out between October 2008 and December 2008, which covered 3,000 units, it was found that 0.92 per cent of workers would lose their jobs,” said a senior official of the ministry. Based on this survey, the overall industry job loss was extrapolated.

However, the textile industry contradicts this and projects a much higher figure of 1 million people who would be rendered jobless by the end of the current financial year.

This sector has been badly hit by the ongoing global recession, which has resulted in closing of many units. About 50 per cent of the total production of textiles and garments in India is exported, of which 60 per cent is exported to the United States and the European Union countries. But the recession in the West has hit the demand.

Indian exporters of textiles and garments are facing stiff competition from manufacturers in Bangladesh, China, Vietnam and Sri Lanka, which produce goods at much cheaper rates.

“There would be a drop of 3 per cent in overall production in the industry, which would see a job cut of around 10.5 lakh (or 1.05 million),” said DK Nair of the Confederation of Indian Textile Industry (CITI). He added that since many units might retain some workforce for new orders, this number would stand at 1 million.

The ministry official, however, disputed this figure, saying that the number of people losing jobs could not cross 500,000 due to the depreciating Indian rupee, which would have a positive fallout on the entire textile industry.

About 5,000 people were rendered jobless due to closure of 12 mills in the organised sector in the September 2008-January 2009 period, when the situation was at its worst. This, according to Nair, is not a correct indicator because the organised sector contributes to just 3 per cent of total textile production.

While 97 per cent of the spinning units are in the organised sector, only 3 per cent of the fabric manufacturing industry is in the organised sector. The entire garment industry comes under the unorganised sector.