Financial Daily
from THE HINDU group of publications

Saturday, August 04, 2001





Course of money, output, velocity and prices
WHAT has been happening to the relation between money and prices in recent years? There is an impression that though the growth rate of money is rather high in relation to that of output, it has had no impact on the year-by-year inflation rate. This impr ession is so widespread that there is no major concern on reducing the annual rate of growth of money.

WHILE NEW DELHI may be justified in claiming that the present policy framework for non-coal minerals is comparable to that of major mineral producing countries, it is clear that unless the States formulate matching policies and gear up their administrati ve machinery, the Centre's initiative will mean little. It is unfortunate that the reforms brought about in instalments by the Centre since 1993, when a new national mineral policy was announced, have not been actively followed up by the States, which ar e the owners of all deposits.

Reneging on the Kyoto Protocol
THE presence of certain trace gases in the atmosphere enables it to act like a greenhouse. An increase in the concentration of these greenhouse gases (GHGs) causes an enhanced greenhouse effect and a warming of the earth, leading to a change in climate. Carbon dioxide emissions from the burning of fossil fuels are the largest source of GHGs. These are most difficult to reduce as energy is an essential input in all economic activities.

Should the FM go?
HE SHOULD, if only because of the fact that he has been in the saddle for some time now and he has nothing to show that his services are invaluable to the nation. True, it is the Prime Minister who always has the last word on a subject such as this, but, of course, Mr Vajpayee is a human being and, being so, is not always expected to be right.

Of doubtful wisdom
THE Finance Minister, Mr Yashwant Sinha, would like to align the tax levied with the revised pay structure of the salaried class. Thanks to liberalisation and the Pay Commission, the pay packets of the employees, especially executives in the higher echel ons of the corporate world, have been revised steeply upwards. The cash part of the pay packet is determined and well known and is subject to tax. However, the attraction lies in the non-cash part, and it is here that the revenue authorities are faced wi th a problem -- evaluating the value of the amenities provided to the employees.

Point, counterpoint
RECENTLY, FCB Ulka Advertising went to the Mumbai CEGAT with a strange dimension to a common problem. The appeal was for condonation of delay -- too ubiquitous anyway -- but the cause for delay was interesting.

Load on accounts
TAX LAWS would influence accounting measurements because the impact on tax income is causing a wide divergence between pre-tax and post-tax incomes.

On a wider net
TAXATION of services acquires greater significance as India becomes more of a service economy. While giving effect to service tax on 15 new services introduced in the Budget for 2000-2001 (effective from July 16, 2001), the Finance Ministry made the foll owing policy and procedural changes:

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