New Delhi: The Union government has rejected the states’ request to financially compensate them for reducing taxes on retail prices of petroleum products such as diesel and petrol.
The finance ministry has told the states that reducing, or increasing taxes was their prerogative and, therefore, the Centre wouldn’t be able to offset potential revenue foregone on account of tax cuts, a senior finance ministry official, who did not want to be identified, said.
Last month, the United Progressive Alliance (UPA) government allowed oil marketing companies to increase retail prices by about 10% and simultaneously cut indirect taxes on them to partially offset the impact on consumers. Prime Minister Manmohan Singh had appealed to states to cut taxes and join the Union government in mitigating the impact of the fuel price hike on consumers. Several states followed suit, but at a meeting later in the month, several of them asked the Centre to offset half their losses.
- Sanjiv Shankaran
Centre says Ram Sethu not national monument
New Delhi: The Union government on Tuesday told the Supreme Court that it doesn’t consider Ram Sethu, a coral walkway between India and Sri Lanka, a national monument.
Senior lawyer Fali Nariman told the bench headed by Chief Justice K.G. Balakrishnan: “Ram Sethu does not fulfil the criteria to be declared a national monument.”
Last August, the Supreme Court had issued a stay order on all construction work for the Rs2,600 crore Sethusamudram project, approved by the government in 2005, which envisages dredging the walkway to reduce sailing time for ships. During the hearing last week, Nariman, citing verses from the ‘Kamba Ramayan’, the version of the epic ‘Ramayan’ that is popular in Tamil Nadu, told the court that Hindu god Ram had broken the mythical bridge “with his arrow in two”.
- Malathi Nayak
Corporation Bank’s profit growth slows
New Delhi: Corporation Bank on Tuesday announced a net profit of Rs184.30 crore in the first quarter of 2008-09, up 4.06% compared with a year ago.
But the growth in the public sector bank’s net profit in this quarter was slower than the 22.7% recorded in first quarter of 2007-08. According to chairman and managing director B. Sambamurthy, this was on account of large provisions made on the bank’s holding of government securities. It made a provision of Rs63 crore towards depreciation of the market value of government securities in the wake of hardening interest rates, compared with Rs18 crore it ploughed back in the year-ago quarter.
The bank’s net interest margin (difference between the yield on lending and cost of borrowing) was 2.43% in the first quarter of 2008-09. The margin fell by about 25 basis points since the end of the previous financial year. The bank’s interest margin is under “terrific pressure” and it plans to increase its low-cost retail deposit base as a measure to combat the pressure, Sambamurthy said.
Corporation Bank’s total income in first quarter of 2008-09 was Rs1,446.28 crore, higher by 16.75% compared with a year ago.
- Sanjiv Shankaran
Syndicate Bank profit falls 60% to Rs88 crore
Bangalore: Syndicate Bank reported a 60.23% fall in its first quarter net profit on provisions of Rs261 crore for depreciation on investments. Net profit was Rs87.89 crore, compared with Rs221.03 crore a year ago.
“The first quarter was a challenging period for the whole banking sector because of macroeconomic factors. Inflation has risen, crude oil prices are up. The short-term interest rates and cash reserve ration has gone up again. We have to factor in all these issues,” said George Joseph, executive director. The bank’s total income rose 13.98% to Rs2279 crore from Rs1999 crore, mainly on the growth in interest income.
On the issue of an increase in interest rates, the bank said it is looking at its peers and would take a decision accordingly. Joseph added that a rise is expected.
- Deepti Chaudhary