Today's Hot Stories - March 01, 2013
10 Headlines for Today(1) Anti-prohibition drive takes anti-Lankan turn in TN
(2) NE elections: No blaming Rio, same govt back
(3) Bangladesh rioting over court verdict kills 42
(4) Montek Singh: A well-balanced budget
(5) SUVs to become dearer
(6) Groupon ousts CEO Andrew Mason
(7) Federer storms into Dubai Open semis
(8) Woods, four shots back of early lead
(9) Mark puts Red Bull on top in Barcelona
(10) Over 50 cows rescued by PFA and Ahimsa activists
5 Stories for Today
(1) Northeast results bring some cheer in Congress camp
(2) Russia backs France’s Syria plans
(3) Budget 2013: Commodity punters will be forced to switch from gold to farm bets
(4) Link patented drug prices to per capita income: Panel
(5) PC effect, long live the grey market
(1) Northeast results bring some cheer in Congress camp
On Budget day, results to three state assemblies provided some cheer to Congress with the party retaining power in Meghalaya.
The good news from Meghalaya was offset by status quo prevailing in Tripura with Left Front returning to power and the regional outfit Nagaland People's Front (NPF) displaying tenacity having been in power since March, 2008.
In Punjab, the Shiromani Akali Dal (SAD) wrested the Moga assembly seat from Congress.
Congress fell just two short of a majority in Meghalaya, but should have no problem in crossing the half way mark since 13 independents have been elected. The results mark a gratifying victory for Congress as former Speaker PA Sangma's outfit lost comprehensively.
CM Mukul Sangma was able to brush aside P A Sangma's National People's Party (NPP) that got just two seats, staying afloat in the Garo Hills. PA Sangma's former party NCP won two seats.
United Democratic Party (UDP), which was a key Congress ally for the past three years, retained eight of 11 seats it had won in 2008.
In Nagaland, CM Neiphiu Rio was able to beat back the Congress challenge, winning convincingly with 37 seats of the 59 contested. BJP won one, NCP (4), JD(U) (1) and independents (8). The win means that the apparent lack of progress on Naga talks has not affected Rio, while Congress has not been able to get the better of the regional leader.
After being dismissed from office when the President's rule was imposed in Nagaland in January, 2008 Rio won the next election. He had previously been CM from March, 2006. The gambit of unseating him before the election in 2008 backfired on Congress and the party has not regained any ground.
The Left Front retained power in Tripura, with CPM winning 49 of 60 seats and Congress having to make do with 10. CPI won one seat.
Source: The Times of India
(2) Russia backs France’s Syria plans
Russia’s President Vladimir Putin said he backed “new proposals” on resolving the Syrian conflict that French President Francois Holland put forward during his ongoing visit to Russia.
“Mr. President has formulated some new proposals that we need to discuss with other partners and try to implement,” Mr. Putin said at a joint press conference with Mr. Holland after their talks at the Kremlin on Thursday.
Neither the Russian President nor his French counterpart gave any details of the new proposals, but Mr. Holland said that they had discussed ways of launching a “political dialogue that would involve all sides in the conflict.”
Mr. Putin hinted at some progress in bridging the positions of Russia and France on Syria.
Source: The Hindu
(3) Budget 2013: Commodity punters will be forced to switch from gold to farm bets
Investors and punters in commodities will be forced to exit the futures market in droves or shift part of their funds to agri commodity futures since the government has introduced a widely-expected commodity transaction tax (CTT) on non-farm futures, which will increase trading costs substantially.
Once the Finance Bill 2013 comes into force, CTT of Rs 10 per lakh, or 0.01%, will be imposed on sellers of non-farm commodities such as gold and silver, which some market experts said could lead to a 30-40% decline in commodity futures volumes.
The FM also cut STT on equity futures to Rs 10 per lakh from Rs 17 earlier, which is expected to boost speculative volumes but is unlikely to drive punters, who have tasted the lure of commodities, to stocks. The revised STT rates will be effective from June this year. Besides raising trading costs, CTT is seen to be most detrimental for MCX, the country's largest commodity futures bourse with an 80% market share.
However, the stock gained 2.4% to close at Rs 1,145 on Thursday. Currently, to trade in gold futures contracts, a trader pays a turnover tax of around Rs 2 per lakh. From April, if she were to sell this contract, her cost would rise to Rs 12 per lakh, or by six times. Analysts claim this would puncture volumes as 50-60% of liquidity in the commodity futures market is contributed by retailers who trade on wafer-thin margins.
"My guess is volumes could be dented by 30-40% within weeks of CTT's implementation," said Naveen Mathur, associate director (commodities), Angel Commodities.
The higher cost of trading in non-farm commodities could cause a shift of speculative funds to agri commodities. However, Ani l Mishra , CEO of plantat ions bour s e NMCE, feels this is unlikely to happen on a large scale as agri products have price bands beyond which they cannot be traded on a given day. This, unlike internationally referenced commodities like gold, restricts volatility. ShreekantJavalgekar, MD & CEO, MCX, said the levy would on an average raise trading cost by 300% and would drive the Indian industry towards dabba trading or international markets.
"With respect to CTT, the discrimination is glaring between agri and non-agri commodities, which is not the case as regards STT (sic). This treatment is like having STT on shares of 'Company A' and no STT on 'Company B'. Further, currency markets are 500% bigger than commodities markets, yet there is no transaction tax levied on them, which is again discriminatory. Gold ETFs too have been charged at 0.001% as against 0.01% for gold futures traded on commodity futures markets. Gold ETFs are 100% backed by physical gold," said Javalgekar.
In an attempt to soften the blow, the finance minister has allowed CTT paid in a particular year to be deducted from business income in the next year if the assessee shows her income as business gains. The move is expected to encourage hedgers, but analysts say it may not be enough to offset the negative impact of CTT.
Mishra believes this will only marginally offset the CTT impact. For instance, if a company pays a CTT of Rs 10 in a financial year and earns income of Rs 100 in the next fiscal, the tax benefit will only be to the extent of Rs 3 and not Rs 10 . Also, though the FM said in his speech that business gains or losses could be set off against losses or gains in commodity futures trading, not the case currently, this found no mention in the Budget memorandum.
Source: The Economic Times
(4) Link patented drug prices to per capita income: Panel
A government panel has proposed that prices of patented medicines be based on the country's per capita income, a move that would substantially reduce prices of costly drugs made by global pharmaceutical firms.
The proposal, which seeks the input of other government agencies as well as industry groups, could provoke the ire of Big Pharma, which has clashed with India over protection of intellectual property, price regulations for generic drugs, and compulsory licenses for costly medicines.
A panel formed under the ministry of chemicals and fertilizers has recommended setting up a committee to negotiate with drugmakers to fix prices of costly drugs used to treat deadly diseases such as cancer, HIV and hepatitis.
The proposal is the latest in a series of measures taken by India to make medicines more affordable for the country's 1.2 billion population.
"If we compare the per capita income with the prices of patented medicines in countries like Australia or France, prices in India are comparatively high and hence, they need to be regulated," a senior ministry official told Reuters, declining to be identified because he was not authorized to speak with media.
Generic medicines account for more than 90% of India's $13 billion pharmaceuticals market. US-based Abbott Laboratories has the largest share of the overall Indian drug market followed by Cipla.
The proposal, posted late on Monday on the ministry website, cites as an example the lung-cancer drug erlotinib HCL, sold by Roche Holding as Tarceva. In India, it costs Rs 35,450 for a month's course of 100 mg tablets, equivalent to Rs 1,21,085 in France and Rs 1,21,650 in Australia.
Based on per capita gross national incomes, if the drug costs Rs 35,450 in India, its respective cost would be just Rs 11,643 in France and Rs 10,309 in Australia based on per capita income in the respective countries, the report said.
The Organization of Pharmaceutical Producers of India, which represents foreign drugmakers in India, did not reply to questions from Reuters.
"If stringent price regulations are enforced then latest drugs will not be made available in India," said Ameet Hariani, managing partner at Hariani & Co, a Mumbai-based law firm that advises drugmakers and other companies.
Source: The Times of India
(5) PC effect, long live the grey market
Trying very hard to not rock the boat translates into making at least one or two boo-boos along the way. In his bid to widen the tax net by targeting affluent individuals, Finance Minister P. Chidambaram has unwittingly hit the middle class the hardest with the increase in excise duty on mobile phones.
Ironically, the affluent will escape unscathed. Individuals looking to buy the flagship models, the iPhones, Galaxies and Lumias, will still purchase without worry. An extra thousand or two thousand rupees shouldn’t make too much of a difference.
Where the hammer will fall the hardest, however, is on the low-cost feature phone segment— a segment that has been created entirely by the middle-class looking to get the absolute best bang for the buck. Bear in mind, these phones (the Ashas, Micromaxs, Lavas) are looked at with an almost shrew-like mentality. The typical range is from Rs. 6,000 to Rs. 12,000, wherein the price tags, even decimal points matter.
According to the Indian Cellular Association, a typical 3G phone that comes at a price of Rs. 8,000 would cost around Rs. 400-500 more. So, where does the customer turn to in troubled times? An altogether different type of market – one the average Indian needs no introduction to— one that has a grey tinge.
The absence of a carrier-bundled system, that subsidises the cost of the handset, has made it such that phones sold in India are already more expensive than those their American counterparts. A further hike will only result in a red carpet being laid out for the grey market to make deep inroads into the system.
What is further contradictory, however, is how this move negates the Government’s goal of connecting its citizens to the Internet. Indeed, a free Wi-Fi system on select trains was proposed just days ago in the Railway Budget. How does reducing the ability to purchase Internet-accessing devices gel with the aims of the National Telecom Policy? Nevertheless, the bottom line is that mid-range mobile phones need to stop being categorized as luxury items. Its economic-booster effect alone disqualifies such labelling. In the meanwhile, the outlook brightens for the grey market.
Source: The Hindu
Disclaimer: All news stories and content sourced from freely available material on the internet. All sources are acknowledged.
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