New Delhi: The group of state finance ministers meeting to discuss the proposed goods and services tax, or GST, has decided to produce a draft paper on the tax. The paper is expected to discuss the implications of the different models that states had proposed for GST. But some states still have their misgivings and want the group of finance ministers to proceed cautiously.
Air India plans to lease out seven of its aircraft as part of its efforts to use its assets more efficiently. Aviation experts say Air India may be leasing out the aircraft because some of them are difficult to operate profitably.
But leasing out planes may not be enough to turn Air India around. A senior government official told Mint that Nacil, the company that runs Air India, has posted losses of Rs2000 crore in the last six months and is estimated to have losses of Rs5,000 crore for the full financial year. Air India already had losses totaling Rs5,000 crore in the fiscal year 2008-09.
Meanwhile India’s airline regulator, the DGCA has issued show-cause notices to JetLite, Paramount Airways and MDLR demanding explanations for what it says are inadequate safety provisions. The DGCA says JetLite lacked the necessary air safety infrastructure, while Paramount Airways has fallen behind in 69 areas of aircraft maintenance and doesn’t have a proper investigation board. The DGCCA also says MDLR has inadequately trained staff and lacks emergency procedures. While the show cause notices do not necessarily mean the airlines are unsafe, they indicate some safety procedures are not being followed.
Also on Tuesday, telecom stocks plummeted on concerns about tariff wars and a proposal from the telecom regulator to make operators charge calls by the second rather than by the minute. Bharti Airtel shares dropped 10.76%, while Reliance Communications went down 10.61% and Idea Cellular lost 8.02%. Recently Tata Tele Services introduced a billing plan that would charge by the second and Reliance Communication followed with a 50paise tariff plan.
Reliance Industries Limited announced a gift for its shareholders on Wednesday, giving them one free share for every share that they hold. The last time the company issued bonus shares was in 1997. On Wednesday RIL’s board also proposed an interim dividend of Rs13 a share for 2008-09, which will cost the company Rs2,219 crore. Analysts say RIL wants to appease investors at a time when it’s engaged in a legal battle over revenues from its profitable KG D6 gas field.
The Finance and Investment Committee of the EPFO has deferred to 24 October, a decision on investing the some of fund’s money in stock markets. EPFO currently has a corpus of about Rs257,000 crore.
Inflation continues to rise with the wholesale price index going up to 0.7% in the week ending the 26 September from a year earlier. In recent weeks, surging commodity prices have driven up prices in India and other Asian countries.
Larsen and Toubro has raised $600 million to fund its expansions plans. It raised $400 million by selling shares and $200 million through foreign currency convertible debentures.