CIL may get Maharatna status by year end, BHEL in queue

New Delhi: State-owned Coal India Ltd (CIL) is likely to get listed by October and may be accorded the Maharatna tag by 2010 end, while BHEL has to wait for at least a year to be awarded with the coveted tag, reports PTI quoting a senior official.

At present, there are four Maharatnas-Oil & Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), Steel Authority of India Ltd (SAIL) and NTPC.

"...CIL will become our fifth Maharatna once its public issue goes through. We were hoping by the end of October and it is pretty much in line with that," secretary in the Department of Public Enterprises (DPE) Bhaskar Chatterjee said here.

When asked if the company would become a Maharatna by the year end, he said, "Yes." He was talking to reporters on the sidelines of All India Management Association function.

CIL, the world's largest coal-miner, would be entitled for greater financial freedom once it gets Maharatna status.

On power major BHEL's qualification for the coveted title Mr Chatterjee said, "BHEL will take at least a year or two (to qualify for the status). It is doing well otherwise but they need to meet minimum norms that will take a little while."

A company needs to have a three-year track record of annual net profit of over Rs5,000 crore, net worth of more than Rs15,000 crore and turnover of more than Rs25,000 crore, besides being listed on bourses to be eligible for the Maharatna status.

CIL, with about four lakh employees, had turnover Rs52,000 crore in fiscal 2009-10. It has had over Rs5,000 crore profit in the past three years.

However, BHEL does not fulfil the net profit requirement criteria to qualify for Maharatna.

BHEL's turnover was Rs33,173.34 crore in 2009-10.

However, the company's annual average net profit was Rs3,433 crore during the last three years.

Maharatna scheme was announced by the government last December to give more operational freedom to the top-performing PSUs.


Educational Loan Scheme has outstanding amount of Rs34,000 crore

New Delhi: Total outstanding loans under the government's Educational Loan Scheme were over Rs34,000 crore in 2009-10, reports PTI.

However, no decision has been taken to set up a credit guarantee fund for the scheme, minister of state for finance Namo Narain Meena said in a written reply in the Lok Sabha.

He said total outstanding loans under the scheme were Rs34,192 as on 31st March this year. The amount of outstanding loan under the Educational Loan Scheme during 2007-08 and 2008-09 was Rs19,817 crore and Rs27,646 crore, respectively.

During the previous three fiscals the number of accounts under it also increased from 12.47 lakh in 2007-08 to 18.51 lakh in 2009-10, Mr Meena added.

Replying to a question on plans to set up a credit guarantee fund for the scheme, the minister said: "No such proposal is under consideration. The government has not taken any decision to set up a credit guarantee fund in this regard."

Mr Meena said the ministry of human resources development has circulated an interest subsidy scheme on educational loan for economically weaker sections (EWS) to banks in May this year, which is for students in recognised technical and professional courses.

"In terms of the scheme, full interest subsidy would be provided by government during the period of moratorium/study and would be applicable to students from EWS with a parental upper income limit of Rs4.50 lakh," he added.


DTC may moderate tax rates, hints finance ministry official

New Delhi: Taxpayers may get relief in terms of tax rates in the proposed Direct Taxes Code (DTC), which is likely to replace the 50-year-old Income Tax Act from the next fiscal, reports PTI quoting a key financial ministry official.

"We are in the process of reducing the rate of tax and DTC will be a good example in that direction," Central Board of Direct Taxes (CBDT) chairman S S N Moorthy said at an Associated Chambers of Commerce and Industry (Assocham) tax conference.

He further said India is coming down to a realistic platform where the rates will be almost in line with international standards. "We are in the process whereby we have to be taxpayer friendly, we have to be in tune with international standards."

At the same time, the government would take measures so that the flight of revenue from India can be checked.

The DTC bill is likely to be tabled in this session of Parliament so that it could replace the archaic Income Tax Act from 1 April, 2011.

In the first DTC draft, the government had proposed a substantial widening of the tax base. It had suggested imposing 10% tax on income of Rs1.6 lakh-Rs10 lakh, 20% on income of Rs10 lakh-Rs25 lakh and 30% beyond Rs25 lakh in a year.

The proposed tax slabs were even substantially wider than the increase in the Budget 2010-11. The Budget imposed 10% tax on income of Rs1.6 lakh-Rs5 lakh, 20% on Rs 5 lakh-Rs8 lakh and 30% on over Rs8 lakh in a year.

However, the revised draft on DTC did not talk over tax rates and finance ministry officials said the slabs given in the first draft were just illustrative.

The second draft also said that the rates proposed in the first draft could be calibrated, after it dropped contentious proposal of taxing long-term savings like provident funds at the time of withdrawal. This means that tax rates may not be moderated so sharply, as was given in the first draft, but some rate cuts would be there.

Mr Moorthy further said that direct tax collections of Rs4.3 lakh crore for the current fiscal are on track.

"The target for the current year is about Rs4.30 lakh crore. Fortunately we are on track. We are growing at the rate of 15%," he added.

He further said tax deduction at source (TDS) collection, which constitutes a major chunk of direct tax, is not adequate but it would pick up. "This year we are going at the (TDS) rate of about 37.5% which is not adequate enough but anyways it will pick up."

Last year, TDS collection touched around 38% of the total revenue. It was about Rs1.40 lakh crore.


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