Archive for October 7th, 2009

India Inc Cautions Govt. for any Regulation on CEO’s Pay !

Corporate India cautioned the government that any regulation of CEOs' pay might lead to escape of talent and capital from the country

Corporate India cautioned the government that any regulation of CEOs' pay might lead to escape of talent and capital from the country

Corporate India cautioned the government that any regulation of CEOs’ pay might lead to escape of talent and capital from the country and that salaries are best decided by the industry.

However, Corporate Affairs Minister Salman Khurshid stated that the CEOs’ compensation should be regulated.

On the other hand, heads of apex industry chambers said that they would like the issue to be complete by and within India Inc.

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Moreover, the Confederation of Indian Industry is working on a governance code for its members to deal with remuneration of executives at board level and a level below.

Further, Khurshid’s remark activated a debate whether pay packets of CEO’s, some of whom are paid as much as Rs two crore a month, should be regulated.

On the other hand, Singhania said with government regulations already in place, any further regulation is in the first place unnecessary whereas as per the present regulation, compensation of all directors cannot exceed 11% of the total profits of a company.

Additionally, the compensation of all directors, including the executive chairman and whole time directors cannot exceed 10% of the company profit.

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Thanks for the advice. But, no thanks..seems to be the polite message emanating from India Inc to the government drive to extend its new found penchant for austerity into corporate boardrooms.

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Corporate affairs minister Salman Khurshid at the weekend said the government could not shut its eyes on CEO salaries and urged corporate bosses to avoid “excessive remuneration” .

According to figures compiled by ET, top 30 Indian executives together pocketed around Rs 500 crore ($100 million) in compensation last year, which is less than what each of their top five global counterparts earned.

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PM asks states to work for GST implementation

PM Manmohan Singh has asked the states to work towards speedy execution of the new indirect tax system

PM Manmohan Singh has asked the states to work towards speedy execution of the new indirect tax system

Prime Minister Manmohan Singh asked the states to work towards speedy execution of the new indirect tax system as the deadline of April 1, 2010, for introduction of proposed goods and services tax is nearer.

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However, the Centre and states have not yet reached an agreement for goods and services to be included in the GST regime.

Moreover, the decision on a lower charge on food products and exemption to some of them is still to be taken.

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Further, GST will do away with most of central indirect taxes like excise and service tax level and VAT as well as subsume local levies like octroi and purchase tax at the state level.

On the other hand, the Empowered Group of State Finance Ministers decided about the levy having a dual structure, one at the Centre and the other at the state level.

States also decided to have 2 main rates for GST along with a special rate for precious metals but the Centre is yet to take a call on it.

However, many states are not willing to subsume the local levy and also have a fear of losing financial autonomy.

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Reliance Comm. Leads the Decline among India Phone Stocks !

Reliance Communications Ltd. turned as a leading declines among India’s telecommunications stocks

Reliance Communications Ltd. turned as a leading declines among India’s telecommunications stocks

Reliance Communications Ltd. fell the most in nine months in Mumbai trading, leading declines among India’s telecommunications stocks, on speculation a price war may hurt earnings after the company cut its call charges.

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Reliance tumbled 11 percent to close at 268.30 rupees, the biggest decline since Jan. 7.

Larger rival Bharti Airtel Ltd. declined 10 percent to 359.35 rupees.

The two stocks were the worst performers today on the benchmark Sensitive Index, which climbed 0.6 percent.

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Sales have been slowing at Reliance and Bharti as competition from Vodafone Group Plc’s Indian unit and new entrants such as NTT DoCoMo Inc. intensifies in the world’s largest wireless market by users after China.

Revenue growth is also easing as wireless subscriptions in urban areas approach saturation level, forcing the companies to target low-spending rural customers for the bulk of their new additions.

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A “price war can impact the revenues of telecom companies by 15 to 20 percent,” said Jagannadham Thunuguntla, head of equities at SMC Capitals Ltd. in New Delhi.

Reliance has said that it will charge a uniform 0.50 rupee (1 U.S. cent) per minute for local and long-distance calls, to simplify tariffs.

The new rates will help the company gain market share for its services based on the global system for mobile communications platform.

“The cut in tariffs by Reliance will distort the revenue structure for companies in the sector,” market experts said.

“It could prompt other companies to follow with cuts” they added.

🙂