Citizens' Issues
Bhupen Dalal’s family buys back flat in auction paying huge premium

The Dalal family agreed to pay Rs12.6 crore in an auction for their own flat at Chitrakoot building on Altamount Road, in south Mumbai, against market value of about Rs9 crore

Rekha Dalal, wife of stock broker and co-accused in the 1992 securities scam Bhupen Dalal, and their daughter-in-law Veena Dalal, have repurchased their own flat in an auction, by paying a huge premium in order to retain it for the family. The flat was put up for sale by the custodian, under the orders from the Special Court.

"The winners (Rekha Dalal and Veena Dalal) outbid other bidders by quoting a price of Rs12.6 crore. They will have to pay the rest of the money, excluding an earnest deposit of Rs20 lakh, within 45 days," said AK Toprani, director, office of the custodian.

According to market sources, the Dalal family was very keen to buy back the posh flat in the upscale Altamount Road area in south Mumbai, which is why they ended up paying a huge premium over the current market price. As per the current market price in the area (the rate is over Rs30,000 per sq ft) the flat would have cost around Rs9 crore.

Earlier in September, the Special Court allowed Bhupen Dalal's flat in Chitrakoot building to be auctioned to recover income-tax dues running into crores of rupees. Last year, a division bench of the Bombay High Court had stayed an order of the Income-Tax (I-T) department demanding that Mr Dalal pay dues of around Rs1,157 crore for the assessment years 1992 to 1994.

According to a PTI report, Mr Dalal argued before the Special Court that the notice of the I-T department was challenged before the Commissioner of Appeals (I-T). A petition had also been filed in the High Court, which had stayed the notice. Since the notice was stayed, the auction of his flat should also be stayed, his counsel Milind Sathe had argued.

I-T counsel Beni Chatterjee contended that the Commissioner of Appeals was slated to decide Bhupen Dalal's appeal on 31st December against the I-T notice on tax dues. However, there was no need to stay the auction. Justice DK Deshmukh of the Bombay High Court then rejected a petition filed by the stock broker seeking a stay on the auction of his flat in Chitrakoot building.


Capital flows likely to exceed $50 billion in current fiscal

New Delhi: The finance ministry today indicated it will not intervene in the foreign exchange market even if capital inflows into the country touch $50 billion during the 2010-11 fiscal, reports PTI.

“$50 billion could have around that. Inflows will continue according to me,” Thomas Matthew, joint secretary in ministry of finance, told reporters on the sidelines of a conference on corporate governance.

Matthew said in reply to a query on whether the capital inflows could exceed $50 billion in the current fiscal as in the previous financial year. Foreign Inflows during the April-September period stood at $37.4 billion.

On the possibility of government or the Reserve Bank of India (RBI) intervening in the market to check surge in capital flows, Matthew said, “The finance minister (Pranab Mukherjee) has already said there is no need to interfere in the market.”

The surge in capital flows, according to the Mid-Year Analysis prepared by the finance ministry, is fuelling stock markets and putting pressure on rupee.

“The main implication of such large capital flows to India has been buoyancy in stock markets and appreciation of rupee vis-à-vis dollar,” it had said.

The capital flows have remained volatile in the past couple of years. It went up to $108 billion in 2007-08 before nose-diving to a mere $8 billion in 2008-09, mainly on account of the global financial meltdown.

The inflows, however, picked up during 2009-10 rising to $53.6 billion.


FM cautions on European crisis; contagion may hit exports

New Delhi: The government today pegged the economic growth rate at a ‘conservative’ 8.75% for this fiscal, and cautioned against contagion effects of the financial crisis in Europe which accounts for 36% of India's exports, reports PTI.

Improvement in exports is essential to bring down current account deficit, which is pegged at 3% of the gross domestic product (GDP) or up to $56 billion and is not sustainable for long term, finance minister Pranab Mukherjee said at the annual general meeting of Associated Chambers of Commerce and Industry (Assocham).

Current account deficit (CAD) represents movement of money out of a country on net basis, barring capital flows.

CAD surged three-fold to $13.7 billion in the first quarter of this fiscal over the same period last year due to higher imports because of economic recovery and larger payments overseas for certain services.

“Current account deficit would be around 3% of GDP and in absolute terms, perhaps around $55-$56 billion (this fiscal) and cannot be maintained for a very long period of time,” Mr Mukherjee said.

“Therefore, recovery of exports is absolutely necessary and those are linked with global developments,” he added.

Mr Mukherjee said 36% of India’s exports go to Europe and if the sovereign debt crisis in Europe turns contagious and spreads, the country will not be able to immediately find new markets.

“Unless there is robust recovery in Europe, immediately we cannot shift our market and improve international trade scenario,” Mr Mukherjee said.

After engulfing Greece, Portugal and Spain, the financial mess has unfolded in Ireland.

Mr Mukherjee also highlighted the need to work together with other countries to build pressure against protectionist measures.

“We cannot live in cocoon, we cannot live simply by raising protectionist measures,” he said.

The finance minister was, however, confident that the economy would grow by 8.75% this fiscal, a conservative estimate given a healthy 8.9% growth in the first half.

“I am a bit conservative so I would be happy if it is 8.75%,” he said.

This estimate is not only lower than what was witnessed in the first half, but also the upper-end of over 9% forecast in the Mid Year Analysis, tabled by the finance minister himself.

Mr Mukherjee said because of the stimulus, fiscal deficit widened to over 6.4% last fiscal, but exuded confidence that it would be pruned to 5.5% this fiscal, as is projected in the budget.


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