Budget 2011-12: Tax structure

With Union Budget 2011-12 nearing, everyone is concerned about the new tax structure that Finance Minister, Mr. Pranab Mukherjee will unveil in the Parliament on February 28^th. All sections are looking towards the North Block, where the Union Budget is being drafted by the Finance Minister, representatives of Finance department.

According to the indications from the revenue department, there is limited room to tinker direct and indirect tax rates in the next financial year. It is impossible to deviate much from the position stated (on direct tax rates as well as goods and services tax rates) in the Direct Tax Code by the finance minister.

The Finance Ministry had indicated a corporate tax rate of 30% and an exemption limit of Rs 2 lakh for personal income tax. On the GST—a 10 % rate on goods and a 8% rate on services was suggested. Sources in the finance ministry tell us that with these positions they have little room to manoeuvre tax rates, and they are likely to remain at these levels. However duties on certain commodities which have seen price rise could be lowered. This in fact is a reason for concern for the finance ministry because it is targeting a 4.8% fiscal deficit.

The tax GDP ratio because of high inflation may also take a beating—non-tax revenues such as 3G will not be there in the next fiscal, since nominal GDP will be high. So the government is concerned about how its tax revenues will grow and the answer to that may lie with international taxation—that’s an area where the government sees growth, especially emboldened by the tax department winning the Vodafone case.

SpiceJet places order for Bombardier's Q400

India's most popular low cost airline 'SpiceJet' today announced to have placed order for 15 units of Q400 NextGen turboprop airliners manufactured by world's leading airliner manufacturer - Bombardier. The announcement was made by chairman of board of director of SpiceJet and Sun Group - Kalanithi Maran.

According to the information available, the order size is to the tune of US$ 446 million. But experts also say that the deal size could increase to the size of US$ 915 million, if all 15 units ordered are custom made to the demands of SpiceJet. The airline currently serves 22 destinations through its existing fleet across India, Nepal and Sri Lanka.The airline recently has filed for permission to fly to more international destinations. The deal signed with Bombardier is expected to a step closer to SpiceJet becoming an international airline.

Bombardier is making significant investments in the infrastructure for its support and services in India and the Asia-Pacific marketplace. Earlier this year, Bombardier opened its new Regional Support Office (RSO) in Mumbai. This office serves both business and commercial aircraft customers and is located in Andheri East near the Chhatrapati Shivaji International Airport. The RSO's dedicated team complements Bombardier's regional Field Service Representatives located throughout India and its surrounding regions.

Bombardier's plan to establish strategically located RSOs is designed to provide a comprehensive support package encompassing aircraft technical expertise, flight operations support and customer account management functions. As a result of the proximity to its operators' bases, Bombardier can provide enhanced service to customers in their language and time zone.

Q400 NextGen aircraft

Optimized for short-haul operations, the "comfortably greener," 70- to 80-seat Q400 NextGen aircraft is a large, fast, quiet and fuel-efficient turboprop. It provides an ideal balance of passenger comfort and operating economics with a reduced environmental footprint. Including Spicejet's order, Bombardier has booked firm orders for a total of 404 Q400 and Q400 NextGen aircraft, and as of October 31, 2010, 322 had been delivered. Q400 and Q400 NextGen aircraft are in service with more than 30 operators worldwide and have logged more than 2 million flight hours and over 2 million landing and take-off cycles. Bombardier recently delivered the 1,000th Dash 8/Q-Series turboprop - a Q400 NextGen airliner. This milestone delivery re-confirmed the Dash 8/Q-Series turboprop program as one of the most successful regional aircraft programs in history.

Hitachi Consulting acquires Sierra Atlantic

Hitachi Consulting announced that it has acquired California based - Sierra Atlantic which has its back office function in Hyderabad today. Hitachi, a leader in delivering IT solutions and strategies expanded its operations, by acquiring Sierra Atlantic, a leader in outsourced product development and offshore enterprise applications. Sierra Atlantic which is known for its best in class delivery models will help Hitachi expand its footprint in the field of strategic consulting. Sierra Atlantic's Global Development Centers located in Guangzhou (China) and Hyderabad (India) will now be part of Hitachi Consulting.

The 2400 employee strong Sierra Atlantic was founded in 1993 and today has its presence world over and will help strengthen Hitachi's Oracle business capabilities. Sierra Atlantic though has its presence in China and India is headquartered in Newark (California - USA) and operates in North America, Europe and Asia Pacific regions. Sierra Atlantic currently has 200 customers from Fortune 1000 list and has a strong presence in the Small and Medium Enterprise (SME) segments also. Sierra Atlantic also specializes in providing enterprise services using Oracle, PeopleSoft, Siebel, Microsoft and Agile – in the discrete and process manufacturing, life sciences, financial services and retail industries. It also provides software development, testing and support services to world-class software companies.

Hitachi Consulting already maintains a depth of experience and leadership as an Oracle solution provider with "Partner of the Year" awards in seven of the last nine years. Sierra Atlantic brings a large pool of certified Oracle experts and more than 14 years of experience in providing end-to-end Oracle E-Business Suite solutions including implementations, upgrades, and application management services. The company’s Oracle managed services cover a wide range of application management services and infrastructure. Combined, the companies will offer an expanded set of Oracle solutions, more robust managed services and increased expertise in business intelligence and edge applications – all on a global scale.

Both companies will utilize their respective business process integration skills to work toward a smooth transition to maintain business momentum, retain personnel and continue the highest quality of client support. The management team of Sierra Atlantic will remain intact and be integral to the success of the newly merged company.

Union Budget 2011-12: Toyota ‘Etios Liva’ after Budget

Every year business decision are taken with an eye on the Budget to be presented in the Parliament on February 28th. India Inc closely monitors and assesses each point made by the Union Finance Minister in his Budget speech to the Parliament. India Inc analyzes the proposals; recommendations made by the Finance Minister and take their business decision in line to maximum on their returns. At times, certain business decisions like launch of new products and services are either delayed or advanced depending on what is expected for the sector from the Budget speech and its proposals. Not just the industry bodies like CII / FICCI / NASSCOM, but even individual companies take a very close look at this process called the Union Budget of India!

Toyota Kirloskar Motors, the Indian subsidiary of the Japanese automobile giant, ‘Toyoto’ has recently taken a decision to delay the launch of its new product the ‘Toyoto Etios Liva’ by few months, in order observe the proposals to be made in the Union Budget 2011-12 and gain from the same. While, the Union Budget 2011-12 will be presented to the Parliament on February 28th, 2011 – Toyota Kirloskar Motors is expected to take decision on the pricing only towards end of March this year.