New Delhi: The government today said work was underway to correct within a month the import duty disparities between natural rubber and tyres, in order to protect the domestic industry, reports PTI.
At present, raw rubber imports attract 20% duty, whereas import duty on tyres is 10%. From China and South Korea, duty on tyre imports is only 8.6%.
"Give me a month's time, we are trying to sort out the problem of inverted duty
structure," Commerce Secretary Rahul Khullar told reporters on the sidelines of a
Confederation of Indian Industry (CII) event here.
According to Automotive Tyre Manufacturers Association (ATMA) estimates, the industry imports about 1.5 lakh tonnes of natural rubber every year. The finished tyre import for truck and buses stands at about 1.25 lakh tonnes a month and 2.5 lakh tonnes a month for passenger cars.
When contacted, ATMA director general Rajiv Budhraja told PTI: "We have been demanding that there should be parity between import and local production. The government proposed a fixed specific import duty on rubber at Rs20.46 per kg, but we want that import duty of raw material should be 7.5% only (on ad valorem basis)."
In March, the industry body had written to prime minister Manmohan Singh to either reduce import duty on natural rubber to 7.5% from existing 20% or to hike customs duty on imported tyre to 20% from 10% to help domestic manufacturers.
With natural rubber prices in India hovering around Rs160 per kg from below Rs100a kg level a year-ago, tyre manufacturers are looking at importing the raw material,but find it economically unviable due to current duty regime.
To cope up with such a situation, domestic tyre makers have hiked the prices of their products by 10%-15% since January this year.
Earlier in May, the government had removed restrictions on import of radial tyres in the wake of increase in prices and their cascading effect on inflation.
While redemptions from equity mutual funds have reached Rs11,450 crore over the past 13 months, 10.44 lakh investor accounts have vanished since last November
Commensurate with redemptions of Rs14,450 crore from equity mutual funds over the past 13 months, there has been a drop of 10.44 lakh folios in this category since November 2009.
According to data provided by the Association of Mutual Funds in India (AMFI), the total number of folios in the equity category slipped by a massive 2.11 lakh in August, continuing the trend of the past eight months. Data between November 2009 and July 2010 shows that equity schemes have lost a whopping 8.33 lakh folios.
Income and debt category funds added 86,879 investor accounts. There were three new fund offers (NFOs) in the income fund category like Benchmark Short Term Fund, Peerless Short Term Fund and Taurus MIP Advantage Fund - which amassed Rs7,981 crore in the month of August.
Balanced funds saw their investor base expanding by 33,607 folios while exchange traded funds (ETFs) added 50,189 folios. HDFC Gold ETF and ICICI Prudential Gold ETF were launched in August which together mopped up Rs366 crore. Canara Robeco Large Cap Fund garnered Rs178 crore. Industry sources are of the view that some portion of equity investments is moving towards fixed income and balanced funds.
HDFC Mutual Fund is turning out to be a winner in the chaos. It is adding to its assets and adding to its investor base as well. The fund added the maximum number of folios (87,450) followed by Axis Mutual Fund which added 45,836 investor accounts. Fund houses like UTI Mutual Fund, Reliance Mutual Fund, Tata Mutual Fund, Sundaram BNP Paribas, Kotak Mahindra Mutual Fund, HSBC Mutual Fund, Franklin Templeton Mutual Fund, JM Financial, Fidelity Fund Management and Birla Sun Life together lost 1.96 lakh investor accounts.
"Distributors are not servicing customers. As and when the maturity date approaches, intermediaries may not be pushing their clients to reinvest the money.
Customers are now becoming more discerning. They are looking at performance aspects. If performance is good then they are reinvesting otherwise they are exiting," said a sales head of a private mutual fund, preferring anonymity.
Moneylife had reported first on 6 September 2010 that a massive Rs14,450 crore flew out of equity schemes since the last 13 months.
The continuing loss of investor accounts is becoming a cause of concern for the industry especially at a time when incentives for selling mutual funds have almost disappeared with rapidly-changing regulatory requirements. The increasingly tighter regulatory norms are already weeding out small independent financial advisors (IFAs).
In July 2010, equity funds recorded a decline of 2.93 lakh folios. It is not clear what the exact base of fund investors is now. Some estimates put the figure at 20 lakh. The industry is in the process of identifying unique customers since individual investors tend to posses multiple folios. "We are trying to work out something to identify unique customers. But unfortunately the system as a whole has not been able to do it," HN Sinor, chief executive officer of AMFI had told Moneylife earlier.
HCL Infosystems Ltd, a major information enabling company, said it has secured re-structured accelerated power development and reform program project worth nearly Rs100 crore from Himachal Pradesh State Electricity Board.
The project will involve use of a state wide solution to establish the baseline data and IT applications for energy auditing and IT based consumer service centres in 14 towns, comprising 30 sub-division offices and 293 other offices.
HCL Infosystems will be setting up a disaster recovery centre, and also modernise the existing data centre along with creating a wide area network.
On Monday, HCL Infosystems shares climbed 4.6% to Rs131 on the Bombay Stock Exchange, while the benchmark Sensex closed 2.2% higher at 19,208 points.