Huge increase in cellphone subscribers
New Delhi: According to data released by the Cellular Operators Association of India (COAI), the cellular subscriber base has grown beyond 88 per cent to touch 1.88 million till April 1, 2000.

The subscriber base, as of that date, stood at 18.84 lakh, with Delhi overtaking Mumbai in the growth of subscriber base. Amongst the metros, Chennai showed poorest growth rate with hardly 54,000 users, while Delhi registered 3.32 lakh connections, Mumbai 3.19 cellular phones, followed by Calcutta with 90,000.

Among operators, Bharti Cellular in Delhi has recorded the maximum number of mobile users with 1.84 lakh followed by BPL mobile in Mumbai with 1.73 lakh users. Sterling Cellular in Delhi registered 1.48 lakh connections while Hutchison Max in Mumbai has 1.46 lakh connections.

Geographically, Gujarat recorded 1.46 lakh connections, followed by Karnataka with 1.27 lakh connections. Similarly, among the `B' class circles Kerala and Uttar Pradesh (East) recorded maximum number of users with 1.06 lakh and 1.13 lakh connections respectively.

According to the report, the delay in implementing the CPP regime--which was supposed to be implemented from November 1 last year but was put off due to an adverse verdict from the Delhi High Court -- has so far not resulted in a slowdown in additions to the subscriber base.

It may also be mentioned that during this entire period of ’99 till February this year rentals were charged at the relatively higher rates of Rs 600 while tariffs were charged at Rs 6. It is only from February 1 this year that rentals and tariffs were reduced by cellular operators in response to a directive from the Delhi High court so that consumers benefited from a reduction in licence fees.
Back to News Review index page  

Finance ministry may yield on taxation of ESOP
New Delhi : The pressure being brought on it from all sides on the relaxation of the tax treatment on stock options, finally seems be bearing fruit. The finance ministry is on the verge of proposing that, stock options be taxed only for capital gains arising at the point of actual sale of shares by employees. Apparently, a proposal to this effect has been forwarded to the law ministry for vetting.

Currently, when the employee exercises the stock option, the difference between the offer price of the stock and the market value at the time of allotment is taxed as a perquisite. Besides, any capital gains arising out of subsequent sale of this stock are also taxed.

The change -- withdrawal of the impost on perquisite at the time of exercising the option and only taxing any capital gains arising out of the sale of shares -- is likely to be incorporated in the amendments to the Finance Bill 2000, scheduled to be moved for passage in Parliament on Wednesday.

The software industry has been consistently lobbying for relaxation in the tax treatment on stock options saying that unless this is done, companies, which have a competitive edge, will be unable to retain their employees.

Earlier on, tax authorities were considering alternative proposals, which included permitting deferment of the incidence of taxation arising at the time of allotment of shares by a stipulated period or allowing employees to meet their tax liability by staggering payments. However, none of the proposals of the Revenue Department cut ice with the Ministry of Information Technology (MIT) or the software industry.
Back to News Review index page  

Premier economic institute predicts 6-7 per cent GDP
New Delhi : The National Council of Applied Economic Research (NCAER), the country’s premier economic institute, has forecast the country's real gross domestic product (GDP) growth for the current fiscal to range between 6.4 and 7.2 per cent in view of the presence of ``both positive and potentially adverse factors that will affect the economy's performance in the year that has just commenced''.

In its latest Review of the Economy, conducted by the Council's Macro-Monitoring & Forecasting Division, it said that on the positive side, the expectations of improved output and trade performance at the global level with expected moderation in crude oil prices provide some stability to the economy and its external balance. The overall inflation rate (reflecting the consumer price index) is projected to be about 4.5 to five per cent. The trade and current account deficits are projected at 2.5 and two per cent of GDP respectively.

On the negative side, the adverse risk factors are led by the vagaries of the monsoon since despite its declining share in GDP agriculture continues to affect the course of the economy significantly. The second factor that could stymie the fast pace in the manufacturing growth is the crucial infrastructure sector. The foremost among these is the power generation capacity, which would have to increase quickly to sustain the escalating demand for energy. It warned that slowdown in reforms in fiscal correction and power sector reforms could act as dampeners on investment climate.

The report also warned that continued large fiscal deficits on the part of the Central and state governments, will affect the investment climate adversely directly by reducing Government's ability to make investments in the infrastructure sector and indirectly by raising the cost of funds needed for private investment.

The economy has also witnessed emergence of ``New Economy'' sectors. As the growing integration of Indian markets with the global markets pose a greater challenge to both the policy-makers and the entrepreneurs, the Council said that at the micro level, upgradation of technology, efficiency in production and marketing and high standards of quality would be the key to growth.
Back to News Review index page