Railway minister Dinesh Trivedi decides to quit

 Dinesh Trivedi’s decision came as an anti-climax as he put up a stiff defiance in the last five days refusing to quit unless asked for specifically in writing by TMC chief Mamata Banerjee. He said he had a constitutional duty to pilot the budget he had presented in Parliament

Kolkata: Dinesh Trivedi Sunday night decided to resign as railway minister bringing the curtain down on the five-day drama after he incurred the wrath of Trinamool Congress for hiking passenger fares in the Railway Budget, reports PTI.

“He (Mr Trivedi) called me and he told me that he will abide by the party decision and send his resignation,” Trinamool Congress supremo and West Bengal chief minister Mamata Banerjee told PTI before she left for Delhi.

She also said that Mr Trivedi told him that he will remain with the party.

Mr Trivedi’s decision came as an anti-climax as he put up a stiff defiance in the last five days refusing to quit unless asked for specifically in writing by Ms Banerjee. He said he had a constitutional duty to pilot the budget he had presented in Parliament.

Angered by his budget hiking passenger fares, Ms Banerjee wrote to prime minister Manmohan Singh on Wednesday night and demanded his replacement with another party nominee and minister of state for shipping Mukul Roy.

As she mounted pressure, the prime minister and Congress leadership assured her that Mr Trivedi will be replaced in a couple of days after the presentation of general budget on Friday last.

61-year-old Mr Trivedi, who represents Barrackpore in the Lok Sabha, had even gone to Rail Bhavan yesterday and presided over a meeting of board members.

When party’s chief whip in the Lok Sabha Kalyan Banerjee asked him over telephone to quit as minister, Mr Trivedi told him that he will not do so unless the directive came in writing from Ms Banerjee.

Even as the stalemate continued, Ms Banerjee decided to fly to Delhi for attending the Trinamool Congress parliamentary party meeting and use the visit for a meeting with the prime minister to apparently urge him to take her party’s concerns on board on not going ahead with the NCTC.

She wants a chief ministers’ meeting to be called on the issue.

Earlier, Trinamool Congress sources said the party expected the Congress leadership to keep its ‘word’ on removal of Mr Trivedi.

During the day, Mr Trivedi said the railway ministry was not anybody’s personal fiefdom.

“I do not want to stick to the ministry. But I also do not want to run away. The prime minister has to decide on it (his resignation). There should not be any politics with the ministry. Railway kisi ka jagir nahin hai (the Railways are nobody’s fiefdom).” Mr Trivedi told reporters outside his house in the national capital.

Mr Trivedi, who has insisted that Ms Banerjee should give it in writing that he should resign, said, “I have high regards for her. She is a good human being.”

 

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Retrospective amendments should be avoided: Plan panel deputy chairman

“I am aware that there has been a very negative reaction. I am sure the finance minister is also aware of it... So as I said, most people tend to regard retroactive amendment as undesirable,” Planning Commission deputy chairman Montek Singh Ahluwalia told a business TV channel

New Delhi: Planning Commission deputy chairman Montek Singh Ahluwalia on Sunday opined that finance ministry not reopening the Vodafone case based on amending the I-T Act would give assuring signals and said generally changes to laws should not be done retrospectively, reports PTI.

When asked in Karan Thapar’s Devil's Advocate programme on CNN-IBN whether it would not help the situation if the finance ministry were to announce that they will not reopen the Vodafone case on the basis of amending the law, Mr Ahluwalia said, “I am sure, it would.”

Mr Ahluwalia further said, “I think what they (finance ministry) have done is, dominantly, to change the law. And I think objectively that particular change is not only an appropriate one, it is something they have signalled in the DTC.”

“... as a general rule I agree with you one should avoid retrospective amendment (in laws),” he added.

Finance minister Pranab Mukherjee in his Budget has proposed amendments in the Income Tax Act with retrospective effect from 1962 to bring into net overseas deals concerning domestic assets.

As per the proposed amendments, all persons, whether residents or non-residents, having business connection in India, will have to deduct tax at source and pay it to the government even if the transaction is executed on a foreign soil.

The amendments, once carried out, will have implications on Vodafone which won the Rs11,000 crore tax dispute case against tax authorities in the Supreme Court. It will also impact other similar cases involving taxes to the tune of about Rs30,000 crore. 

Meanwhile, the finance ministry today allayed fears of negative impact of the proposed amendments on foreign direct investments.

“The apprehension that the retrospective amendments would create negative sentiment for FDI is not correct. FDI comes when there is profitability, FDI does not come only on account of zero tax,” finance secretary RS Gujral told industry leaders here.

About the impact of the proposed amendment on Vodafone case, Mr Ahluwalia said, “I do not want to comment on the impact on any particular company. I think ... it is not only appropriate one, but something we have signalled in the proposed DTC. We are going to do that anyway.”

In the Vodafone case, the Supreme Court of India had held that the Income Tax Department does not have the jurisdiction to levy withholding tax for its $11 billion acquisition deal with Hutchison Essar in 2007.

When pointed about HDFC chairman Deepak Parekh’s criticism of the proposed amendment, Mr Ahluwalia said, “I am aware that there has been a very negative reaction. I am sure the finance minister is also aware of it... So as I said, most people tend to regard retroactive amendment as undesirable”.

On the impact of this move on foreign investment flows, he said, “Whenever you have retrospective amendment which affects an individual, he will certainly feel that he has been treated unfairly.”

However, he allayed fears that this will impact the flow of foreign funds into the country. “I think that foreign investors should have absolutely no doubt in their mind that the government does not intend to change some of the basic conditions retrospectively.”

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With no tax on diesel vehicles, auto makers mull expansion

“There has been no mention of an additional tax on diesel vehicles or on the existing differential pricing of diesel in the Budget...I would therefore assume that diesel vehicles will not be treated any differently,” M&M president (Automotive and Farm Equipment Sectors) Pawan Goenka told reporters

New Delhi: As the Budget has spared diesel vehicles from the much feared additional tax, auto firms such as M&M (Mahindra & Mahindra), Hyundai and Maruti Suzuki are expected to press ahead with plans to expand engine capacities in this segment, reports PTI.

Before the Budget 2012-13 was presented on Friday, Society of Indian Automobile Manufacturers (SIAM) had said that fear of diesel tax and lack of a clear roadmap on diesel pricing led auto companies to hold back investments of more than Rs3,000 crore in India.

At present, petrol is deregulated but diesel prices are still decided by the government, which provides subsidy on the fuel that is used by the transportation sector and impacts the cost of several essential goods and services.

Rising petrol prices have increased manifold the demand for diesel vehicles over the past couple of years. Hence, of late, there has been strong demand from various quarters for an additional tax on diesel cars.

“There has been no mention of an additional tax on diesel vehicles or on the existing differential pricing of diesel in the Budget...I would therefore assume that diesel vehicles will not be treated any differently,” M&M president (Automotive and Farm Equipment Sectors) Pawan Goenka told PTI.

He said this will encourage companies that had held back investments on new diesel engine capacities, awaiting clarity on the issue, to go ahead with their plans.

“As far as M&M is concerned, whatever we have held back on increasing production capacity of diesel vehicles, we will be going ahead now,” Mr Goenka said.

While he did not specify how much investment was held back on diesel expansion, the company had announced that till FY13-14 it will invest Rs5,000 crore on new products and capacity.

Hyundai Motor India (HMIL), which had put on hold its Rs400 crore diesel engine plant last year, said it is evaluating the situation after the Budget.

“We have to weigh the pros and cons as there has been no mention of diesel tax in the Budget. Within two weeks we will be taking a decision on whether we should go ahead with our diesel plant or not,” a spokesperson for HMIL said.

The plant was envisaged to have an annual capacity of 1.5 lakh units for three types of engines—1.1 litre, 1.4 litre and 1.6 litre for the domestic market.

Maruti Suzuki India (MSI), which has also been awaiting clarity on the issue, said those companies with diesel manufacturing capacity would be pleased with the Budget’s silence on petrol-diesel price differential.

Asked if MSI would consider going ahead with the plans for increasing diesel engine capacity, company chairman RC Bhargava said: “We can only say after the project report is completed and considered by the management.”

When asked if it was encouraging for automakers that diesel tax has not been imposed, Mr Bhargava said: “Yes, it is encouraging for those companies with diesel manufacturing capacities but if I were a petrol car maker, why should I be discriminated?”

Stating that diesel prices should also be made market driven like petrol, he said it is not yet clear how long the current quantum of disparity in the prices between the two fuels would continue.

“If there has to be a differential, the government must spell out clearly by how much, so that we can plan accordingly,” Mr Bhargava said.

SIAM said leaving diesel vehicles from additional tax was one of the very few positives for the auto industry in the Budget.

“At least diesel vehicles have not been attacked. There seems to be a clarity on the issue for the time being. I think this may encourage our members to go ahead with their planned investments on diesel engine plants,” SIAM senior director Sugato Sen said.

Earlier, SIAM had said many of its members were still unclear whether they should invest on diesel technology or not in India as there is no clarity on how the fuel will be priced in future.

It had said firms that have held back investing on diesel engine plants include Maruti Suzuki, Hyundai Motor India, Ford India, General Motors India and Tata Motors.

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