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The Montek Singh Chat

'I am bullish on India'

Rediff On The NeT (Tue Aug 6 19:08:05 1996 IST):

From: Tim Lovell, Director, Seamico Marlin Securities Indian government policies till date have been more to ensure continuance of the existing management. Very little is being done to push managements to maximise shareholders wealth and returns on equity. This would be possible were takeovers to be made more easy, as it would force managements to be more accountable. Present policies as it stands does not facilitate easy hostile takeovers. What is the government’s view on this?

From: Subodh Purohit, Hamon Consolidated The decision to allow issue of non voting has had a negative impact on stock market sentiments as there is a lack of accountability. The move is seen as damaging to the country’s interests as it goes against the tenets of ensuring optimum utilisation of scarce capital. This ensures managements to continue to act as owners of the company with very low stakes. Is the government having a rethink on the subject, more so with FIIs harbouring a negative view on this subject?

From: Sree Shankar, Fund Manager, Barings Peacock Are there plans for PSU corporations to issue non voting shares? Is the government aware that not only would FIIs not subscribe to such shares but they would also sell existing voting shares held by them. Were they to follow up on this threat, PSU share prices can be expected to substantially depreciate. Please comment.

From: S V Kamath, Sivan Securities, Bangalore That infrastructure growth will be a bottleneck to GDP growth is well accepted. Are we not losing valuable time in giving it wholehearted support? Would it not be better to be more aggressive on this front?

The Budget seems to have become a please-none Budget Not the stock markets, not the IMF, ... If you were given a free hand (without 14 parties breathing down your neck, would you have prepared a similar Budget.

From: Sucheta Dalal, The Times of India The FM says that he is not concerned about the stock market. Is this the official government view on the markets? Or can investors look forward to some attention to their demands?

patience, people, mr ahluwalia isn't here yet. is vikas around? need something from him.

From: S Balachandar 1] When is India likely to make the Rupee freely convertible for individuals? 2] Can an NRI own houses in India? Is there a limit on the number of houses he can purchase? 3] Is the new government likely to consider giving NRI’s permanent resident status in India ( much like the American green card)?

from: Somasekhar, The Times of India What is the logic behind non-voting shares? Will PSUs such as HPCL issue such shares to retain government control?

to: yazad get him on fast buddy. We are'nt here for nothing. The queue's got too long.

From: Ketan Sheth, Analyst/Investor The government was quick to reduce DAP price to restore N: P: K: ratio. However there is a clear soft-pedalling on the urea price hike. Urea subsidies have not increased because imports of Urea is less in the current year. Please comment.

to SOM: yeah, yeah i hear you. but he's doing important sarkari business. i hope. he'll be here soon.

From: Mukul Vallabji, NRI It is very difficult to know the number of equity shares outstanding due to loan conversion, warrant conversion etc. Would it not be better for the complete disclosure of equity shares outstanding in the annual report including future conversions?

Which was the harder budget to frame - Dr Singh's first budget or Mr Chidambaram's?

Corporate balance sheets continue to be very non-transparent . Basic details such as computation of taxation liability , segmental accounts , outstanding number of equity shares and so on are not available . Please comment.

From: The Times of India Do you plan to have any restrictions on external commercial borrowings by individual corporate groups? What is the total borrowing you will permit by the private sector?

hi there..:)

HELLO PEOPLE. I'M HERE. LET ME first catch up with what i have recd so far, then we go on

Is it not time that company's have only one set of accounts both for shareholders and tax authorities?

From: The Times of India. You have fought shy of reforming the insurance sector? Where will you find the funds for capital-intensive projects such as those in infrastructure?

From: Dhanesh Shah, Director, Optimum Securities The government allowing MNCs, listed in the Indian stock markets with 100% subsidiaries in the same product range as the existing company, has gone against the interest of minority shareholders. What are the measures the government will take to prevent such cases?

Past five budgets have concentrated on revenue raising ,of course in a more refined manner, but as yet no mention of expenditure control especially revenue variety. Please comment

Hell Montek, we met many many years ago at Oxford. I have a question. The interest payment burden of the government is Rs 60,000 crores a year, equivalent to almost half the revenue of the govt. What GOI doing about ligtening this burden??

Questions being posted under Rediff On The NeT, Mr Ahluwalia, have been sent to us by e-mail from all over the globe. Thank you for accepting our invitation to Chat. I hope you enjoy it.

to SOM: the demand for nonvoting shares has been made by several sections of industry essentially on the ground that they exist in many other countries and provide a measure of flexibility for managements to tap a pool of investors who may be intersted n trading off higher dividend yield or discounted prices against absence of votin power. we've only ageed to inoporate this opion in the amended Companies Act subjecto the usual precuations regarding limits on these shares and appropriate disclosure. whether teh shares are well recd or not, or whether in particular companies they should be at al issued is a matter to be decided by te markets and usual governance procedures within the companies. this wwould apply to HPCL also.

From: Tim Lovell, Director, Seamico Marlin Securities Indian government policies till date have been more to ensure continuance of the existing management. Very little is being done to push managements to maximise shareholders wealth and returns on equity. This would be possible were takeovers to be made more easy, as it would force managements to be more accountable. Present policies as it stands does not facilitate easy hostile takeovers. What is the government’s view on this?

what's happening Mr Ahluwalia? We're eagerly waiting for your answers?

to BALACHANDER: ful convertibility of the rupee is still in the future. An NRI can certainly own residential property in India. NRI permanent resident status has been suggested by some NRI organisations and is still under consideration.

From: Rajesh Bhatia, Cost accountant, Mumbai Considering the present state of the stockmarkets would the government be in a position to push through with its Rs 5,000 crore PSU disinvestment programme in the current year?

From: Amul Vora, Corporate Database Non voting vitiates corporate democracy and protects inefficient promoters at the expense of mute minority shareholders. Instead equity buyback by a company makes more sense to enable existing management to augment their holdings. Your views on this please.

Hello Montek, We met many many years ago at Oxford. I have a question. The interest payment burden of the government is Rs 60,000 crores a year, equivalent to almost half the revenue of the govt. I am worried even if you are not. What is the GOI doing about ligtening this burden??

to SUCHETA DALAL: The FM did not say he is not concerned about the stock market. On the contrary, his Budget speech gives clear indication of a firm commitmnet to strengthen the functioning of the stock market. The deposiories legislation which was passed a few ays after the Budget is a major milestone in improving stock market functioning which will greatly help investors. We are continuously looking out for suggestions for further improvement.

From: Subodh Purohit, Hamon Consolidated The decision to allow issue of non voting has had a negative impact on stock market sentiments as there is a lack of accountability. The move is seen as damaging to the country’s interests as it goes against the tenets of ensuring optimum utilisation of scarce capital. This ensures managements to continue to act as owners of the company with very low stakes. Is the government having a rethink on the subject, more so with FIIs harbouring a negative view on this subject?

From: Raji Wilson, Investor, Mumbai We request you to give your views on liquidity in the remaining months of the current year. More so as in the short run the stock market is a function of liquidity in the system. Also do you feel that CRR and SLR ratios are high in India compared to what exist in other countries?

to DILIP THAKORE: The interest burden is certainly a problem. But it reflects the size of the debt which has accumulated over years. We are committed to reducing the fiscal deficit which will reduce the growth of debt in future and theerefore control the interest burden. TheFM has said that it is our objective to reduce the fiscal deficit to 4 per cent of GDP. If we can do this over te next 2 years, we would have gone a long way towards reducing the interest burden as a per cent of revenue.

FS, while the government is privatising industry, why have we decided to nationalise the stock exchanges?

You mentioned insurance sector privatisation by the next Budget. Is that a realistic time frame and how will the many parties in the present Government react to it?

mr ahluwalia. today we are chatting in the most modern of mediums, the internet. about a few thousands have access to it, say 0.0005 per cent of Indians. But 40 per cent of Indians still use the bullock carts and do not always get 2 square meals a day. Is not the gap between the rich and poor increasing? And what is the govt doing to narrow the dangerous gap?

Does it not make more sense to auction loss-making public sector enterprises lock stock and barrel and utilise the proceeds to retire government debt?

MR AHLUWALIA: While non voting shares have existed in many developed markets they have not succeded anywhere and are almost defunct...2] Knowing the penchant of many Indian promoters for more money under any excuse(oops sorry...instrument) this provision is most likely to be abused rather than any good coming out of it.

From VBE, BBY: You are known personally to be against non-voting shares. There has been considerable criticism. Why is the govt not wanting to send a signal to the market by deferring the whole proposal?

to SCHOLAR: I don't think this is a please none Budget. The stock market did weaken for a few days after the Budget, but that ios a very short-term response. My impression is, that a number of responsible observers of the Indian economy have appreciated the fact that the Budget gives a clear signal of continuation of economic reforms in a number of areas including tax policy as well as industrial policy, foreign investment policy and the policy of attracting private sector resources into infrastructure. The IMF to my knowledge, has not pronounced on the Budget. Their annual consulltation report will be prepared only by September.

The Market for global capital is like any other market that is becoming increasingly competitive with ever increasing dissemination of information countries in need of capital must sell themselves proactivly and restrict beureaucatic obstructions to aminimum. Whilst no one denies right to vet foriegn investors. Why does India treat the process as a priviledge to be charged rather than welcoming all inst. investors from the world?

From: Seamico Marlin Securities, Hong Kong, How does the government propose to protect the interest of minority shareholders in an environment where the low stakes existing management disregard small investors interest? To cite a case of LMW, a reputed blue-chip company, that cut dividend to save Rs 6 million out of cash profits of over Rs 900 million, goes on to buy an aircraft worth Rs 90 million and takes a managerial remuneration of Rs 12 million. The management did not feel the need to even mention the reasons for the cut in the dividend in the annual report. The market cap of the company has been halved in the period of last two months.

Mr Ahluwalia:Reading between lines , based on your comment about respeonsible people and stock market weakening , it appears that stock markets in your view consists of irresponsible people. Any comments

Mr. Ahluwalia congrats on another good and sincere effort

:-)

:-(

The Market for global capital is like any other market that is becoming increasingly competitive with ever increasing dissemination of information countries in need of capital must sell themselves proactivly and restrict beureaucatic obstructions to aminimum. Whilst no one denies right to vet foriegn investors. Why does India treat the process as a priviledge to be charged rather than welcoming all inst. investors from the world?

is there any particular reason why the FIs usually support the sons and relatives as successors in private companies instead of promoting a professional management culture?

The ICICI GDR issue did very well, and so must have the TELCO issue by now. Does that mean that there will be a flood of paper in the GDR market?

From: Seamico Marlin Securities, Hong Kong, How does the government propose to protect the interest of minority shareholders in an environment where the low stakes existing management disregard small investors interest? To cite a case of LMW, a reputed blue-chip company, that cut dividend to save Rs 6 million out of cash profits of over Rs 900 million, goes on to buy an aircraft worth Rs 90 million and takes a managerial remuneration of Rs 12 million. The management did not feel the need to even mention the reasons for the cut in the dividend in the annual report. The market cap of the company has been halved in the period of last two months - From Jayverdhan Velu.

Mr AHLUWALIA: On all major policy issues, all responsible governemnts seek to generate a prior debate and opinion building. On an important issue like non voting shares, no debate was generated and it came as a bolt out of blue. Why should our budgets not reflect summation of aspirations built up in a systematic manner rather than spring surprises?

I am back after a break in the connection (hence the different name). stand by.

There are several people who have talked abut non-voting shares. I'll talk to them all. First let me say that we know that many people have reservations about non-voting shares. However, non-vting shares do exist in other markets. All we are doing is allowing companies to issue a limited quantity of non-voing shares subject to prudential limits and full disclosure. The details have yet to be worked out and this will be done when the necessary amendments to the Companies Act are moved.

If the shares are not popular the markets will send the right signals to the companies. Shareholders will obviously have a say in whether nonvting shares are to be offered and if so on what terms.

If the markets don't like the shares, the terms on which they are offered will have to be made very attractive, which may not appeal to existing voting shareholders. As long as there is transparency in what is involved, we believe that companies and their voting shareholders that wish to issue non-voting shares should have the option to do so.

I hope this answers all questions.

From: Mukesh Patni, Member BSE, Mumbai Talking about a level playing field why is BOLT is not allowed to go national while NSE is expanding all over India? Is it because NSE is promoted by government-backed institutions?

:-)

FS: The transparency you are talking about is a sham in our context because it did not prevent 100 per cent subsidiaries, super attractive preferential allotments to promoters, conversion of preference shares into equity shares, and so on. You are feeding the markets to the wolves.

Also, is it the new policy of the GOI to insist that companies like Coke dilute part of the holdings to the Indian public? If so, would you expect shares of Coke India to be listed?

ve ben discussing these issues with our financial institutions as well as with the leading indutry associations. Finally, there is also the threat of management change through takeovers among other means. We do have a takeover code laid down by SEBI. However. this is new and no doubt it will take time to be reflected in practice.

From: Dhanesh Shah, Director, Optimum Securities The government allowing MNCs, listed in the Indian stock markets with 100% subsidiaries in the same product range as the existing company, has gone against the interest of minority shareholders. What are the measures the government will take to prevent such cases?

.

From: The Times of India Why is'nt the government sending a clear signal on the taxation aspect of non-voting shares? MIllions of small investors' savings has been invested innocently in these instruments.

WHEN WILL THE GOVERNMENT GIVE A FREE HAND TO PUBLIC SECTOR BANKS TO RATIONALISE STAFF, CLOSE DOWN UNVIABLE BRANCHES, ALLOW DIFFERENTIAL INTEREST RATES PER BRANCH AND REDUCE COMPULSORY PRIORITY SECTOR LENDING TO MAKE THEM MORE COMPETITIVE. THIS IS MORE SO WITH THE ADVENT OF PRIVATE SECTOR BANKS WITH STATE OF THE ART TECHNOLOGY ??

to S V KAMATH: Infrastructure is extremely important. We have done a lot for this sector. e.g. tax benefits for infrastructure funds, savings benefits for infrastructure bonds, tax benefit for infrastructure producers, and setting up the IDFC for financing commercially viable projects.

Is it really possible to cut the fiscal deficit? A lot of bankers feel we could go the Mexico way. Do you think you can avert such a crisis?

to SOM: I'm not sure what clrification you want on taxation aspect of non-voting shares. If you elaborate, I'll respond.

From: Ketan Sheth, Analyst/Investor The government was quick to reduce DAP price to restore N: P: K: ratio. However there is a clear soft-pedalling on the urea price hike. Urea subsidies have not increased because imports of Urea is less in the current year. Please comment.

THE WORLDWIDE TREND IN BANKING IS MERGERS AS THE INDUSTRY GETS MORE & MORE COMMODITISED. WHEN WILL THE GOVT. ALLOW A FREE HAND IN TAKEOVERS & MERGERS OF INDIAN BANKS, TO ENSURE THAT THEY REMAIN COMPETITIVE ?

hello I'm Ray from Batterymarch in Boston. I would like to know whether the 24% ceiling on FII ownership is being revised upwards to 49%.

to DHANESH SHAH: This issue is currently being looked at by the Foreign Investment Promotion Board. We hope to evolve a policy which takes care of any perceived unfairness to existing shareholders in a joint venture.

hello I'm Ray from Batterymarch in Boston. I would like to know whether the 24% ceiling on FII ownership is being revised upwards to 49%.

to RAY: There is no such proposal at present.

On an interview i read on Rediff On The NeT, Dinesh Keskar, the president of Boeing India, spoke of the light and day difference between the foreign investment approved and the actual investment that comes into the country. In the last couple of years, less than 15% of approved investment came through. How do we raise this figure from 15 % to 50%? Why is all this approved investment not happening?

Mr Ahluwalia you seemed to be answering question with generalisation. Questions demanding specific answers are yet unattended.

From: Raju Vasanthraj, ITC Classic, Mumbai There is a feeling that revenue is overestimated and expenditure is understated in the Budget paper. Please comment.

Could you please clarify whether a private limited company engaged in 100% exports and having a turnover of under Rs. 50 million be liable to pay MAT.

SIR, WITH DEVELOPMENT FINANCIAL INSTITUTIONS OFFERING YIELDS OF AS HIGH AS 17-18%, REAL INTEREST RATES ARE PROJECTED TO REMAIN HIGH WELL INTO THE FUTURE. WOULD THIS NOT MAKE INDIA HIGHLY UNCOMPETITIVE IN THE GLOBAL MARKETS (HIGH COST OF FUNDS) ?

There is a feeling that the FIIs are determining govt policy.

Past five budgets have concentrated on revenue raising ,of course in a more refined manner, but as yet no mention of expenditure control especially revenue variety. Please comment

From: Rajesh Bhatia, Cost accountant, Mumbai Considering the present state of the stockmarkets would the government be in a position to push through with its Rs 5,000 crore PSU disinvestment programme in the current year?

to raj: I'm not aware of the particular case you have mentioned. However, there is no substitute for shareholders getting into the act and asserting their rights. It may not happen in all cases but people will learn. If you have any suggestions, send me a letter and we will look at them.

Did you have less freedom framing this Budget than you did under Dr Singh's time? What will all these Commies breathing down your neck? I believe the Commies are allergic to you and your freemarket policies.

to MITESH: Interest rates have been high, but we believe this will not continue. Some rates have already softened. Wth the fiscal deficit coming down, and an inflow of funds from abroad, they will soften further.

Mr Ahluwalia: Parent of an existing MNC in India floating a paralell 100% subsidiaryb is clearly violating the interest of existing company. Foriegn parent is bound to promote interest of 100% subsidiary at the expense of existing company. Why should this be premitted at all ?

How do you plan to come down on banks, who are borrowing in the call at 2-3% (indicating easy availability of funds) and have yet only marginally reduced their lending rates and are so earning great margins?

Mr. Aluwalia what will be the effect of budget proposal on 100% EOU not in export zone

Mr Ahluwalia, your answering ability is legendary. We thought you'd take a break for the Internet and give us some direct answers on whether or not all MNCs will have to offer some equity to Indians as a pre-condition for doing business in India?

Mr Ahluwalia, as the first non IAS officer to be finsec, one expected you would give less bureaucratic responses. Could we expect some candour please?

IN THE NEAR FUTURE, IS A 6% REAL GROWTH IN GDP SUSTAINABLE WITH LITTLE OR NO INFRASTRUTURE DEVELOPMENT . MOST INFRASTRUCTURE PROJECTS HAVE YET TO BE INITIATED AND WOULD TAKE ATLEAST ANOTHER 5 YEARS TO BE COMMISSIONED. YOUR VIEWS ON THIS ??

Mr. Aluwalia what will be the effect of budget proposal on 100% EOU not in export zone

Could we have some illumination please?

From: Dhanesh Shah, Director, Optimum Securities The government allowing MNCs, listed in the Indian stock markets with 100% subsidiaries in the same product range as the existing company, has gone against the interest of minority shareholders. What are the measures the government will take to prevent such cases?

Mr Ahluwalia the only answer to mute minority shareholders plight is a hostile takeover code. That is the only way to chastise bad management, put good management on their toes and maximise shareholders value - From A Grief Stricken Investor.

to QMAN: You can't have a mechanical relationship between call monay rates and lending rates of banks. Very short term liquidity in the call money market which is only providing resources at the margin, cannot be expected to lead to an immediate softening of lending rates.

From: som Sorry. The question was about deep discount bonds. There is confusion about whether redemption would be capital gains or interest. Can't the government clearly state that investors need not make a charade of transferring bonds just before redemption.

Mr. Aluwalia what will be the effect of budget proposal on 100% EOU not in export zone

Mr. Aluwalia what will be the effect of budget proposal on 100% EOU not in export zone

How confident are you that under the present administration your liberal economic policies will be continued?

Perhaps, Mr Ahluwalia, you like giving long answers. That's fine by us. We have come in from all over the world to be enlightened on the state of the Indian economy. And you could do that better than anyone else.

From: Mukesh Patni, Member BSE, Mumbai Talking about a level playing field why is BOLT is not allowed to go national while NSE is expanding all over India? Is it because NSE is promoted by government-backed institutions?

Hello I ma ravi from Virginia how are you :-)

Member BSE, Mumbai Talking about a level playing field why is BOLT is not allowed to go national while NSE is expanding all over India? Is it because NSE is promoted by government-backed institutions?

to RAMESH1: Your question on whether all MNCs will have to offer shares to Indians amounts to asking whether 100 per cent equity will never be allowed. The short answer is that we do allow 100 per cent equity in certain cases. However, we certanly prefer foreign investors to share equity with Indian shareholders. Several observers have suggested that the conditions under which 100 per cent equity will be allowed should be made clear and transparent. This matter is being considered by the FIPB. If you have suggestions, do write,

Hello I ma ravi from Virginia how are you :-)

Before going into my suggestions, could you, to begin with, clarify about Coke having to offer a part of its equity to Indian shareholders? The market is very anxious to know the answer to this one!

to RAJ1: BOLT going national is not exactly comparable with NSE. NSE operates through its own brokers and it freely licenses brokersa all over the country. The BSE which wants to extend BOLT is not ofering to expand the set of brokers. It is offering to operate through sub-brokers in other parts of the country. This raises an issue of the responsibility of the exchange for non-peformance by sub-brokers abd therefore impinges on investor protection. We have been looking at different ways of solving this problem and have been discussing it with SEBI.

Please let me know whether a Private limited firm is liable to pay MAT even if its turnover is approx. Rs. 30 - 50 million !?

Mr Ahluwalia the only answer to mute minority shareholders plight is a hostile takeover code. That is the only way to chastise bad management, put good management on their toes and maximise shareholders value - From A Grief Stricken Investor.

Hello I ma ravi from Virginia how are you :-)

Mr Ahluwalia, your answer to Raj1 on the BOLT expansion is a whitewash!

to MADHU: Hi Madhu, you can be quite sure that the policies announced in the Budget which aim at strengthening the economic reforms have wide support. As the FM said, we need more reforms, not less.

hello from sridhar

Is this forum still on?

:-(:-(:-(:-(

to RAMESH1: Coca-Cola have recently been given permission for a proposed $ 700 million investment (over a 10-year period) which initially involves 100 per cent equity with an undertaking to disinvest part of the equity in future.

sugata, it still is, so shoot

About MAT, remember?

Mr Ahluwalia you are saying to post you the suggestions so would you please give us your e-mail address.

Mr Ahluwalia: Ref you answer to the Coke question, is it by way of public issue, or to bottlers and associates? We would appreciate a CLEAR answer!

WITH the proposed abolition of the FIPB what is the government's alternate method for regulating foreign direct investment.... ............kindly answer this questio9n.

hello ravi, hello sridhar. Sugata, stay tuned, the forum is still on.

Montek Uncle, On the lighter side, it is nice to see your picture on the internet.

Please oh please answer my question regarding MAT. And also this one regading the bearing industry!!!! You have waived the specific duty on bearing components. This is going to cripple the indigenous bearing industry with many companies opting to import components and assembling those here which is a simple procedure but reduces development of technology and employment. Please comment.

:-( :-(

hello sugata, nice to see you here, just as you promised, at 8.30. :-)

Most MNC's are charging a very high royalty to the Indian Subsidiary on sales, much more than their pre-taxed margins in most other countries. Locally they have much higher royalty payout compared to total profits in the domestic listed companies

Montekji, mere prashno ka uttar jaldi dijiye. Mein bahoot utawala ho raha hun. Shukriya.

dear PRIYA & ANAND: Good to hear from you. I am glad you are taking an interest in the Indian economy. It is in much better shape than my picture on the Internet, which is a bit fuzzy.

From: Raji Wilson, Investor, Mumbai We request you to give your views on liquidity in the remaining months of the current year. More so as in the short run the stock market is a function of liquidity in the system. Also do you feel that CRR and SLR ratios are high in India compared to what exist in other countries?

From: Deepa Sankaran, Equity Analyst, Mumbai Will the government place a cap on royalty payments that can be made by Indian subsidiaries to its parent MNCs? As there have been cases where royalty payments in the last year have been more than 80% of net profits.

..

From: Tim Lovell, Director, Seamico Marlin Securities Indian government policies till date have been more to ensure continuance of the existing management. Very little is being done to push managements to maximise shareholders wealth and returns on equity. This would be possible were takeovers to be made more easy, as it would force managements to be more accountable. Present policies as it stands does not facilitate easy hostile takeovers. What is the government’s view on this?

Most MNC's are charging a very high royalty to the Indian Subsidiary on sales, much more than their pre-taxed margins in most other countries. Locally they have much higher royalty payout compared to total profits in the domestic listed companies.

to MINTOO: Ref yr q on MAT for smaller firms -- I think MAT would apply to all companies. But pl check with yr chartered accountant who knows your particular situation.

Montekji: Please lend me your eyes!!!!!!!!!!!!!!!!!!!! MAT on 100% export oriented private limited companies with a turnover under Rs. 50 million!!!!!!!!!!!!?????????????? The million rupee question??? IS MAT APPLICABLE???????? Bearing Industry: Will indigenous manufactures suffer due to reduction in import duties of broken down kits????? The other million rupee question??? Please oh please reply !!! Oh please please please!!! Thanking you in anticipation!!! Thanx!! Thanx!! Thanx!!

:-(

to DEEPA SANKARAN: Our regulations do not allow royalty payments from a 100 per cent owned subsidiary to its parent company. For other companies royalty payments are allowed subject to a limit of 5 per cent of domestic sales and 8 per cent on export sales. Whether a company makes a profit or not depends on several other factors in the market. I don't think we can relate royalty payments to profits. Incidentally, royalty payments are also taxed.

Mr Ahluwalia, Given the diversity of the UF govt., the CMP is probably the best that we can expect. However, with the Finance Minister ruling out privatization of banks and the Communits complaining about tax breaks to the power sector, we have to wonder if India will not get left behind the much faster East Asian economies. Any comments?

Most MNC's are charging a very high royalty to the Indian Subsidiary on sales, much more than their pre-taxed margins in most other countries. Locally they have much higher royalty payout compared to total profits in the domestic listed companies.

Hey, there, Montek, what are you doing chatting when you should be working, hmmmmm? :-o

will budget proposal have a effect on private research institue established by the individual enterprenur & obtained an approval from dept. of science & tech. govt. of india

I'm your old boss remember me-:-)I'm going to buy you a COKE if you answer this question directly is it your understanding that COKE INdia will offer shares to the Indian public and be Listed on the Indian stock exchanges...YES OR NO??

I'm your old boss remember me-:-)I'm going to buy you a COKE if you answer this question directly is it your understanding that COKE INdia will offer shares to the Indian public and be Listed on the Indian stock exchanges...YES OR NO??

mr ahluwalia, i truly appreciate your answers to the bankers and brokers on matter truly arcane. but i am neither. can you tell me how long it will take to bridge the awesome and definitely growing gap between india's rich and the millions of poor. will it occur before they explode, and will our vested interest ever ever sacrifice their interests for the good of the country? pls answer

to RAJI WILSON: The liquidity position has already improved as is evident from the call money rates. I expect the improvement to continue. Our SLR and CRR rates are indeed high compared to other countries. However, we have been lowering them over the past few years. As the fiscal deficit improves, we can expect further lowering in future. TO MINTOO: Hang in there, I'm checking with an expert for the answer to your questions. Give us a few minutes.

Can India ever match China in its appeal to foreign investors? What are the biggest hurdles facing the Indian economy?

Can India ever match China in its appeal to foreign investors? What are the biggest hurdles facing the Indian economy?

hello Mr. P.Chidambaram we missed the chance to talk with you on the net

I like this - here I am breaking my head sochke ke is mahaan Bharat mein garibi kaise door kiya jaye, and you people are playing computer games?

Mr Ahluwalia, I have long admired you and Mrs Ahluwalia's work on the Indian economy. I just want to know whether we can ever become a global economy superpower, given the vast disparity between the classes in India, which the govt seems least interested in narrowing, and given the tugs and pulls of the Indian polity? I would also appreciate a time frame on when the deficit will be cut?

mr ahluwalia, we are following the trickle down theory, perhaps more out of a lack of choice than conviction. but on what basis will it work. even in the US today, the number of poor and homeless are increasing, not decreasing

to RISHI: Yours is undoubtedly the most important question. Please be assured that the purpose of the economic reforms is precisely to improve the conditions of living of the vast majority of our people. This can only happen if the economy grows at a faster rate -- say 7 to 8 per cent a year -- which will create a broad based growth of income and employment. The fact is that our own experience shows that when the economy grows faster poverty is reduced. It is lower today than it was 15 years ago. There's a good chance of reducing it substantially over the next 10 years.

mr ahluwalia, i appreciate your answers to the bankers and brokers on matter truly arcane. but i am neither. can you tell me how long it will take to bridge the awesome and definitely growing gap between india's rich and the millions of poor. will it occur before they explode, and will our vested interest ever ever sacrifice their interests for the good of the country? pls answer

I'm your old boss remember me-:-)I'm going to buy you a COKE if you answer this question directly is it your understanding that COKE INdia will offer shares to the Indian public and be Listed on the Indian stock exchanges...YES OR NO??

Has the government a definite plan to improve the living standards of our people? By 2000, will the state of our peole be better or worse?

SIR, THE WORLDWIDE TREND IN BANKING IS MERGERS AS THE INDUSTRY GETS MORE & MORE COMMODITISED. WHEN WILL THE GOVT. ALLOW THE FREE HAND IN TAKEOVERS & MERGERS OF INDIAN BANK, TO ENSURE THAT THEY REMAIN GLOBALLY COMPETITIVE ?

Montek Don't you think it is high time we start having common set of books for share holders and tax authorities?

mr ahluwalia, thank you for your reply. but the worry. the last budget spoke a lot of the social sector. but where will the money come from, and what mechanism does the government have to ensure it reaches those at the bottom

to MINTOO: Good news!! If you are a 100 per cent EOU, you benefit from the provisions of Sec 10A or 10B and therefore MAT is not applicable. As for your second question, we have recd representations from bearing manufacturers and these are being examined.

What can the finance ministry do to make its institutions more transparent? SeBI, for instance, has an honest man at the helm, but have you ever seen the grime and graft beneath? Do you have any plan to tackle this?

All the learned talk of economists is beginning to tire me. What I finally need to know is do you see some day when we weill stop being a begging developing country and become a respectable memeber in the family of nations?

Which are the three most dramatic developments you envisaGE IN THE Indian economy in the next 18 months?

From: Raja Gopalan To: Mr. Ahluwalia and Mr. Rishi We are certainly following the path of reforms to improve the standard of living of our people. However, liberalization does not have to mean trickle-down economics. The Asian economies are both open and have high levels of government intervention and this mix of capitalism and social awareness has brought them to the levels of the Western countries in less than 50 years.

mr ahluwalia, in an interview last year, mr manmohan singh had categorically said that india cannot match china's growth rate because the indian democracy will not tolerate the accompanying inflation. then given our polity, will we ever be able to match china whose absence of democracy seems more helpful in boosting economic growth

Mr Ahluwalia: What measures you are taking to curb the circulation of fake currency notes?

Mr Ahluwalia: What steps are being taken to bring out the blackmoney?

Thank you very much, Montek!! It puts me at a lot of ease since we have just formed a private limited export firm (2 days prior to budget). I will look forward to getting good news with regards to the bearing industry through newspapers in the coming days. It would be nice if we could have your email address. Best Rgds and Bye-Bye for now.

Sir what about MAT ON 100% eou not in export zones

SIR, MITESH HERE YOU HAVE NOT REPLIED MY 9 OUT OF 10 QUESTIONS (THE LAST ONE BEING ON BANKS)

Sir what about MAT ON 100% eou not in export zones

Well folks, it's time to go. It was fun talking to you. I hope I was able to answer at least some of your questions. I was impressed by the number of questions that wanted to be reassured about India's future. Things have gone very well so far, and I don't see any reason why they shouldn't keep improving. So I'm bullish on India. Bye for now...

mr ahluwalia, the economy worldwide is changing and the biggest industries are going to service and communications, both of which call for skilled manpower. yet there are millions of indians who are illiterate and unskilled. will they be left behind in the next century with little to offer to the country and therefore bypassed by the country

Mr Ahluwalia, Why don't you take five more questions?

Mr Ahluwalia.... Please....

Mr Ahluwalia... Just five more questions from our worldwide audience.

Mr Montek please please stay for 15 mins and answer 2 of my questions please!!!!!

Mr Mmontek Singh .. aren't you enjoying yourself???:-(

Mr Montek please please stay for 15 mins and answer 2 of my questions please!!!!!

Mr Ahluwalia, before you go it is very important for me to know whether people like yourself who have so much influence on our quality of life do see a day when we will no longer be a begging developing nation?

mr ahluwalia, please ignore the idiots and answer to our concers. please, just a few more answers.

Mr Ahluwalia: please stay for some more time...

Mr Ahluwalia, are you reading us?

mr ahluwalia, please ignore the idiots and answer to our concerns. please, just a few more answers.

mr ahluwalia, are we really prepared to be a economic power in the next century when the world will be dominated by high skills and knowledge. india still has the maximum number of illiterates and semi-literates who are ill-equipped to face the new challenges

Mr Ahluwalia????????????????

booo hooo hooo!!!!!

I am sorry folks. I have just learnt from our colleagues at Mr Ahluwalia's home that he has concluded the Chat and sat down to dinner. So, Bon Appetit, Mr Ahluwalia, and we hope all of you have enjoyed the Chat. There will be a lot more Interesting Chats on Rediff On The NeT. Lively, Provocative Chat. Only on Rediff On the NeT. It was lovely having you here and let's keep Chatting in the Small Smoke Filled Cafe next door.

I am sorry folks. I have just learnt from our colleagues at Mr Ahluwalia's home that he has concluded the Chat and sat down to dinner. So, Bon Appetit, Mr Ahluwalia, and we hope all of you have enjoyed the Chat. There will be a lot more Interesting Chats on Rediff On The NeT. Lively, Provocative Chat. Only on Rediff On the NeT. It was lovely having you here and let's keep Chatting in the Small Smoke Filled Cafe next door.

Montek Singh Alhuwalia with Rediff On The NeT staffer Yazaad.