Thursday, February 28, 2008

Mark Kobayashi-Hillary

Q: Any views on the Som Mittal issue?

A: "It's all a shame really that it has to come to this. It is entirely led by some petty and faceless bureaucrats. Som Mittal is working tirelessly for India as the head of Nasscom and in his former role at HP does anyone really think that he would not have cared for the welfare of his employees? I think it is all a waste of court time and people should be asking who is footing the bill for all this wasted time and effort."

Mark Kobayashi-Hillary (

In an e-mail exchange.

Bindhumadhavan Gururajan

Q: Being in a pharmaceutical research environment, what attracts you to innovation?

A: "Innovation, for me as a Pharmaceutical Scientist, is about producing effective and efficient medicines. I am always looking for new ways boost efficiency, productivity, quality and speed. And why? Well partly it’s obvious - I want to see patients getting great medicines as soon as possible. But there is another side too. I admit I enjoy the scientific challenges and the use of state-of-the-art technologies. The puzzles we take on are difficult and important, and these are the kind that appeal most to scientists."

Dr Bindhumadhavan Gururajan, Senior Scientist (Process Engineering), Product Development, PAR&D AstraZeneca R&D, UK

In an e-mail interview.

Wednesday, February 27, 2008

Dhyaneshwar B. Chawan

Q: Is it necessary that we get back to some of the traditional food practices to reinvent the wisdom? Examples.

A: "YES. Periodical FASTING, eating certain foods –Neem Flowers for Ugadi, Sesame seeds based foods during Naga Panchami and so many other traditions were adopted with ‘religious connotation’ so people follow the ‘ritual’ without questions. These products have certain compounds to ‘tune’ up our system. You must be aware how breathing exercises have become routine herein USA for stress relief. I heard from Cardiology nurse this morning that they are teaching how the sound ‘OM’ is practiced in their classes for patients after surgery. This is helping them (I was told) for quick recovery and healing. Our country has wealth of knowledge and resources and we last track of them due to personal choices/reasons!!!???"

Dhyaneshwar B. Chawan, Srim Enterprises, US (

In an e-mail interview.

Tuesday, February 26, 2008

Geoff Magee

Q: Are there things that the Budget can address, to ensure a faster growth of the hospitality industry? And what have been the demands long ignored?

A: "Taxes have always been the worry for hospitality!! Why can't we also have here a uniform Policy India wide?? Luxury tax is different State-wise in India. Some states levy more than others."

"Similarily licence rates, and sales taxes, and travel and transport rules and regulations. Our industry hardly has any tax sops worth mentioning."

"Incentives can go a long way to addressing faster growth.The industry has been one of the leading earners in foreign exchange, but the benefits have never filtered down to us. Since we have been associated with the 'Luxury Tag,' we are always looked at to foster taxes?"

Geoff Magee, Chief Executive Officer, The Accord Metropolitan, Chennai

In an e-mail interview.

G S K Velu

Q: What has been the story of medical equipment industry thus far, in India?

A: "The medical technology industry is a victim of identity crisis in India, without a space in both healthcare and technology industry."

"The industry has never been an area of focus by the government and the domestic manufacturers are placed in a struggling phase like the pharma industry 20 years ago. In the past decade the industry has witnessed no large-scale initiative in this sector. Indigenous initiatives are restricted to very few low technology products."

"The market for the high-end products is purely dominated by the MNCs who are free traders in the country without any manufacturing intent."

Dr G S K Velu, Managing Director, Trivitron Group of companies, Chennai

In an e-mail interview.

Sunday, February 24, 2008

K. Ganapathy

Q: Considering that today's academic load on students is far higher than what used to be a few decades ago, in what ways do you suggest that a professional student can enhance his throughput and at the same time enjoy the exercise?

A: "While conceding that today's academic load on students is far higher than what used to be a few decades ago, it is equally true that learning tools and exposure have developed even faster than the quantum of knowledge that needs to be studied. Today we are in an era of information overload. In the sixties and seventies we had to spend hundreds of unproductive hours searching for information rather than studying the information. That was the BC era ( Before Computers)."

"I do not think today’s student has too much to complain. My three-and-a-half-year-old grandson is already at home with a computer. As Samuel Boswell Johnson once remarked 'an educated person is one who know where the information is' .. "

"It is not necessary to store thousands of facts in one’s brain. Once we learn how to learn, what to learn and where to learn, confronting the so-called academic load is a matter of effective time management. The Internet and the world wide web if properly used can certainly enhance a student's throughput and at the same time he can enjoy the exercise."

Prof K. Ganapathy, Neurosurgeon, Apollo Hospitals, Chennai

In an e-mail interview.

Friday, February 22, 2008


Q: One key thing in my fitness routine.

A: "Walk up the stairs."

Gowrishankar, CEO, Aspire Systems

In an answer to '60 Seconds Chief'.

Amitava Roy

Q: One clue that tells me I'm the leader.

A: "When others listen."

Amitava Roy, President, Symphony Services

In an answer to '60 Seconds Chief'.

Kishore Musale

Q: One teacher I remember, and why.

A: "Mr. Mathoo, my geography teacher - he was repetitive to the extent we never forgot what he taught."

Kishore Musale, Chairman & Managing Director, Astarc Group, Mumbai

Answering a question for '60 Seconds Chief'.

Thursday, February 21, 2008

Srinivas Rao Saripalli

Q: The future, as you envisage, of mobile usage...

A: "The way I see it, the next thing to happen in the telecom sector is the upgradation to 3G (third generation) technology and of course PC-isation of the mobile. There is no argument that PC-isation is the pinnacle of the upcoming mobile genre. "

"Currently we are in the 2.5 Generation, which enables voice and improved data rates transfer; but with the advent of 3G, that is the third-generation wireless technology and networks (which is likely to take place soon in India), we will be in an era where voice, data and entertainment will converge onto a handheld device. For example, downloading a full-movie on a mobile will hardly take few minutes. The mobile can be used as a photo manager, video chat, media video player (You Tube, Internet Radio) etc."

"As technology (3G) moves into the realm of next-generation application and platform, WCDMA (Wideband CDMA) and CDMA2000 are by far the dominant standards in terms of current commercial services, operator deployment plans and vendor support."

"WCDMA technology is the 3G standard chosen by most GSM/GPRS wireless network operators wanting to evolve their systems to 3G-network technology. It encompasses higher data transfer rates and provides wireless connections greater than GSM/GPRS and EDGE (Enhanced Data for GSM Evolution)."

Srinivas Rao Saripalli, Circle Operating Officer, Tamil Nadu, Tata Teleservices

In an e-mail interview.

Vivek M. Jain

Q: Why BPM (business process management)?

A: "BPM’s roots are in workflow, but it differs in a couple of significant ways from the workflow that you have built into many of your corporate applications today. First, it focuses on the end-to-end execution of the process – no matter how many organizational or system boundaries are passed along the way."

"Second, end-to-end visibility of the process delivers unprecedented insight into how that process is performing. This type of process control and analysis is virtually impossible for most companies to do today because of the system and organizational boundaries. Third, great BPM solutions were built to support change because processes are always changing – for competitive, organizational and regulatory reasons. "

"So, BPM gives process owners great flexibility in describing, executing, analyzing and improving processes. It provides a business-oriented architecture that allows process owners to set improvement goals and orchestrate actions across the company to achieve those goals. The results can be dramatic – and fast to achieve. An insurance company eliminated 80% of the manual work in their process in the first version. A health care provider saved 21,000 administration hours in the first year in on-boarding, nursing and support staff in their hospitals. Finally, one of the largest telecommunication service providers in the world saved $3M in the first quarter of deployment by better processing of disputed bills."

Vivek M. Jain, CEO, StrApp Business Solutions (P) Ltd (

In an e-mail interview.

Wednesday, February 20, 2008

Tom Troubridge

Q: How does India compare with China in capital markets?

A: "China nearly matched Europe in 2OO7 raising Euros 76billion from 24O IPOs. China has a very active retail market like China and many large deals oversubscibed . This can make the market more volatile as retail investors are more inclined to react to market sentiment . China is still a sgnificant source of international IPOs to New York with over half of 5O international IPOs in 2OO7. This is partly due to the influence of US investment banks in China. In contrast only one large Indian IPO went to New York in 2OO7."

Tom Troubridge, head of the Capital Markets Group of the PricewaterhouseCoopers UK firm

In an e-mail interview.

Geoff Magee

Q: One dream I'd like to chase, later in life.

A: "If I wait to chase dreams later they will never come true!!!Ive chased them from the age of 5 … Many have come true."

Geoff Magee, Chief Executive Officer, The Accord Metropolitan, Chennai

An answer in '60 Seconds Chief'

Sunday, February 17, 2008

Karthikeyan V

Q: On the need for PLM.

A: "PLM (product lifecycle management) is the process by which manufacturing companies develop, describe, manage and communicate information about their products, both internally and among their supply chain partners."

"This process begins at the earliest phases of design and development and continues throughout the entire life of the product, which includes production launch, mass production, and, retirement. PLM solutions provide the visibility into product development and provide enterprise-wide information across the globe, necessities for manufacturers who must reduce time-to-market, and yet maintain product excellence."

Karthikeyan V, Director – Technical, EDS Technologies Private Ltd, Bangalore (

In an e-mail interview.

Saturday, February 16, 2008

Neeraj Gulati

Q: One signal that tells me there is a problem.

A: "If the smiles seem to have faded, there’s a problem. Very often, team leaders in their hum-drum of daily routine miss this minor indicator and this if addressed at the right time can be the single most bonding factor."

Neeraj Gulati, Managing Director, Ciena India Pvt Ltd (

When responding to '60 Seconds Chief'

Thursday, February 14, 2008


"I think that we must look at the current controversy around the DTA of India with Mauritius in the context of the long standing special relationship between the two countries. Let us not forget that Mauritius chose the date of its political independence on the historic day that Mahatma Gandhi started the famous Salt March, ie on a 12th of March. In its struggle for economic independence, Mauritius turned to India for transfer of intermediate technology, for technical expertise, for supply of machinery, raw materials and foodstuffs, for many of its imports, such that India remain our main import supplier until today, with a huge trade balance in its favour, as Mauritius exports practically nothing to India."

KC Li, Chairman, Mauritius International Trust Co. Ltd, Port Louis, Rep of Mauritius

In an e-mail interaction.

Ganapathy Lakshmanan

Q: Rural practice is a hot topic these days. What, according to you, can be an effective way to ensure that our villages have adequate health facilities? Do we need any change in our medical education policies?

A: “We do have a good system in paper but it does not function in a proper manner due to several reasons. We do have primary health centres, taluk headquarter hospitals, district headquarters hospitals, and medical college teaching hospitals.”

“As you know, Government-run hospitals have their own problems due to finance, work ethics, etc. Here, in the US, we do have similar problems with veterans and other Government-sponsored hospitals. In India, we need to have a model that combines the US and Canadian healthcare systems.”

“In the US, every County (analogous to our taluk) with a population of thirty thousand has a rural hospital, which takes care of emergency visits, medical, surgical and obstetrics and gynaecology problems. Doctors have to live within a distance of 20 miles from the hospital if they want to practise in that particular hospital.”

“State Government also has clinics and the Government has to compete with local doctors to generate income for their clinics. Every one has to work sincerely. Private medical doctors can see their patients in their clinic and they do admit their patients in their local hospital for needed treatment. They get paid from the State Government, private insurance and from the Federal Government.”

“Those who want to work hard will make more income and those who want to work minimum hours will have less income. Every one, whether with money or not, gets basic and emergency care with the same standard of care.”

“We need to prepare our Indian medical graduates focussing on preventive medicine and maternal child health issues. We need to pay attractive salary and offer nice working environment. Government and private sectors can play a major role to provide rural health service. We need to provide good pharmacy systems to patients, which will help them to continue their respective medications.”

“We need to educate our rural people about the importance of basic health care, clean water facility, sanitation. We need to have good supportive rural medical centre to promote education. When you provide good service and listen to patients’ problems, they are going to follow your advice and do well with their health. It will be a challenging task to implement in India but it can be done through hard work and dedication.”

Lakshmanan Ganapathy MD, Obstetrician / Gynaecologist, Selmer, Tennessee

In an e-mail exchange.

Egidio Zarrella

Q: Can you list the critical success ingredients of an effective KPO (knowledge process outsourcing)? Also, what are the challenges and barriers that KPO units have to overcome?

A: "The customer today is smart. He has his requirements clearly defined and he has a certain expectation from the service provider. With regard to the KPO, a client wants a service provider who has the necessary expertise and skills. Has a good depth of knowledge and understanding of the services he offers. Has experience in focused areas. The outsource service provider must customized solutions for the client and must be flexible."

"The challenges faced by the KPO units are recruiting and retaining the right talent. Due to the high complexity nature of work, there is a high demand for quality, data security and compliance. The KPOs have to at all times face tough competition from other countries. Another industry challenge they have to face is with regard to information infrastructure and branding."

Egidio Zarrella, Global Partner in Charge, IT Advisory, KPMG

In an e-mail exchange.

Monday, February 11, 2008

Vishwas Udgirkar

Q: In what ways can the Union Budget 2008-09 have a positive impact on infrastructure financing in the country?

A: "The Budget can enhance infrastructure financing in a number of ways. It could increase allocations to different infrastructure sectors, provide fiscal incentives, facilitate the development of the domestic debt market and induce foreign investments into infrastructure."

"Last year’s Budget initiated the process for utilising foreign exchange reserves for infrastructure financing and permitting domestic mutual funds to launch and operate dedicated infrastructure funds. The Committee on Infrastructure Financing, headed by Mr Deepak Parekh, made several recommendations for meeting the country’s infrastructure financing requirements and I expect forthcoming Budgets to address them."

Vishwas Udgirkar, Executive Director, PricewaterhouseCoopers

In an e-mail exchange.

Saturday, February 09, 2008

S. Sam Santhosh

Q: Where do you see the future growth coming from?

A: "Geographically, we are expecting major growth from Europe. Historically over 85% of our revenues have been from the US. But this year, in spite of the company growing by over 40%, the contribution from US has been reduced to 65%, with over 25% coming from Europe."

"For our Enterprise Business Solutions SBU, we expect considerable revenue growth from the Oracle ecosystem. In our Product engineering Services SBU, we are focusing on Next Generation Data Center Products (NGDC)."

S. Sam Santhosh, President & CEO, California Software Labs, US

In an e-mail interview.

Thomas John

Q: Do you find acceptance to the idea from the commercial establishments where you would like Ooha to be present in? What are the challenges?

A: "I would say the response is rather mixed… We approached a few commercial locations and they would like us to pay them a monthly rent. We in fact expected this reaction from commercial property owners because they might not be able to see the immediate benefits that an Ooha station will bring to them. We believe that over time Ooha will have an amazing effect on the way people buy products and services."

"We are very confident that everyone - which includes retailers, mall owners, companies, advertising agency etc and of course the customers and users of this kiosk infrastructure - will benefit from it tremendously. Best part of the whole infrastructure is that it is an open platform for people and companies to experiment. It’s all up to what people can imagine and do with it."

Thomas John, CEO of Ooha Services India Private Ltd

In an e-mail interview.

Thursday, February 07, 2008

Pradhyumna T. Venkat

Q: What are the unfolding new areas of RFID application?

A: "We find RFID deployments in the most unusual and unexpected places. We find them tracking people & assets, cattle & tree identification, electronic cash and so on. While cost consideration has forced a delay in Item level tagging, the technology has been successfully serving other applications. We find increasingly newer applications on RFID these days. Electronic ticketing, Airport management system, Postal and Logistics application are a few key areas where the technology has been successfully deployed."

Pradhyumna T. Venkat, CEO, Gemini Traze

In an e-mail interview.

Wednesday, February 06, 2008

Peter Wink

Q: Are you doing anything for Nano? And what are the big OEM contracts in India?

A: "Presently we are not doing any thing for Nano directly. We are in discussion with almost all the automotive OEM’s in India (passenger car as well as commercial vehicles) and also the OEMs in the construction and agricultural machinery field. And in most of the future models Mann and Hummel Filter Private Ltd will play a major role when it comes to filter and filtration systems."

Peter Wink, Managing Director of Mann And Hummel Filter Pvt. Ltd India, Bangalore

In an e-mail interview.

R. Bupathy

Q: On conversion of existing agricultural land for setting up industrial activity.

A: “Instances may arise where an hitherto agriculturist may start an industry on a portion of the land with due approval for setting up an industrial unit from the authorities concerned. For this he may transfer the land to the company he has formed for that purpose.”

“The question arises whether such land transfer comes within the purview capital gains taxation on the plea that the land is no longer put to agricultural activities.”

“What is important here is whether before transfer, any agricultural activity was carried on or not. It is possible that the Department may take the view that since industry is set up on the land it has lost the character of agricultural land.”

“It is an issue to be debated.”

R. Bupathy, Chennai-based CA, past president of the ICAI

In an e-mail exchange.

NVC (National Vigilance Corps)

Q: On your idea of NVC (National Vigilance Corps).

A: “Light a candle, the darkness vanishes. There is no point in cursing the darkness”, said Rabindranath Tagore. The mission of SIV-G ( is to light as many candles as possible by instilling self imposed vigilance in the young minds and make them realise the importance of good governance. The basic premise is to tell the youngsters, ‘this is right, do it’ instead of telling them ‘this is wrong, don’t do it!’"

"The idea of NVC is to establish a network of students in each and every educational Institution (both colleges and schools) across the nation, on the lines of NSS and NCC. The NVC will ensure Self Imposed Vigilance on themselves and then instil in others in their surrounding with the synergising and multiplying effect to ultimately make good governance a reality in the days ahead."

"I have already made this proposal to two Chief Ministers (Delhi and Gujarat) and requested them to establish NVC. I have also written to the Chief Minister of UP about SIV-G as there seems to be a definite tilt towards good governance as these states have established a centre for good governance for training of employees. These proposals were made last month and the responses are awaited."

Govindarajan Suresh, Self Imposed Vigilance for good Governance (SIV-G)

In an e-mail interview.

Tuesday, February 05, 2008

Debashis Sarkar

Q: What is the future of 'Lean'?

A: "Beyond process optimization, lean has to be leveraged for product and process development. Beyond Toyota, lean product development is fairly new to manufacturing companies. Thanks to the research work done at University of Michigan, Ann Arbor; today we have a lean product development process for manufacturing companies. Of course, it would take some time before this body of knowledge is used and customized for service design."

Debashis Sarkar, author of 'Lean for Service Organizations and Offices – A Holistic Approach for achieving Operational Excellence' (

In an e-mail interview.

Monday, February 04, 2008

Patrick O. Connelly

Q: Can changes to laws and policies facilitate better risk management? Examples.

A: "Changes to laws and regulations are integrated into the very fabric of trade within an economy. For instance, how easily and with what level of integrity, cost, time and efficiency a specific bankruptcy law, or debt legitimization process may be followed, directly effects the perceived and actual risk in the market, as well as the cost and time necessary to implement a strategy to trade in that venue. Once these are established, it follows that establishing a strong foundation of basic business, risk management skills and corporate discipline will enable an aspiring trading partner to move forward with managed risk. Certainly this is encouraging since an element of risk improves the return of the investment."

Patrick O. Connelly, University of South Florida

In an e-mail interview.

R. Ram Kumar

Q: On your work in the WiMAX space, the ‘big brother’ of Wi-Fi.

A: "Pointred Telecom Pvt Ltd, a fully owned subsidiary of Gemini Communication Ltd is the first Indian company to start working on outdoor wireless & now, to come out with WiMAX base stations in IEEE 802.16d. Pointred is also working on 802.16e, mobile WiMAX which would be ready for commercial sale from Q3’08. These products are designed in our labs in Bangalore and manufactured in our Taipei facility."

R Ram Kumar, Founder, Director, Gemini Communication Ltd.
Founder, Chairman, Gemini Traze RFID Pvt Ltd
Director, Pointred Telecom Pvt Ltd

In an e-mail interview.

Virtual datarooms – the new transaction backbone

"The advent of datarooms was necessitated by the increase in number of suitors for companies, the necessity for better organization of the information supporting the due diligence process, the need to complete the diligence within the shortest possible time and above all the need to minimize disruptions to the operations of the acquiree company."

Anand Jog, Associate Vice President, Transaction Support, E&Y

In an e-mail exchange.

Outsourcing facility management

Q: What are the economics of outsourcing facility management?

A: "When the manpower is direct there are many hidden costs, whereas if facility management same is done through a contractor, costs will be a fixed amount. A 10-20% cost saving can be achieved."

Laxminarayan PS, CEO, Metromaster

In an e-mail interview.

Sunday, February 03, 2008

Lookout for the Real Estate sector

"REITs would also provide an opportunity for retail investors with nominal investments to enjoy the relatively healthy returns real estate investments earn. It is important that a taxation regime for these funds is also announced, so that the legislation can actually be implemented."

"While the Government has the benefit of being able to chose from best practices of other countries, it is feared that given the amendment in the last budget wherein the so called “pass through” status for Venture Capital Funds was removed (other than certain specified sectors), REITs may have to brace for some complex rules."

"Many other legislative changes, particularly on stamp duty would also be required to make the schemes workable and it may not leave the Government enough time to carry out all such changes as part of the Budget."

Abhishek Goenka, Partner, BMR & Associates

In an e-mail exchange.

Retail trends

Q: What trends do you see in the retail industry?

A: "We see tremendous amount of activity in three distinct areas. Indian players are set to expand and grow. In addition, there is significant amount of interest from large international players."

"We have heard reports that large international players like Carrefour, and Starbucks are keen in entering this market. Tesco has already expressed its intent. The Australian retail major Woolworths is rapidly finalizing strategies for an Indian retail foray. They may enter the Indian market either directly or through Joint Ventures with local partners. Large Indian entities with sustainable strategies are keen to align with these global names. There is bound to be hectic parleys between the international players and domestic entities in finalizing JV strategies..."

K V Ramanand, Regional Director, Transaction Advisory Services, Ernst & Young

In an e-mail exchange.

Budget and the Mutual fund industry

"Dividend distributed by Equity oriented schemes are exempt form DDT under Section 115R of Act. When FOF invests in equity oriented schemes, they derive income from such equity schemes of other funds and the aforesaid exemption is applicable."

"However, when such FOF itself distributes dividend to its unitholders, such exemption is not available on the ground that it has not invested its funds 'directly' in equity shares. Hence, such FOFs which invest 65% or more of its investible funds in equity oriented scheme of other mutual funds should be treated in par with the equity oriented funds and exemption under section 115R should be granted."

R Anand, Partner, Global Tax Advisory Services, Ernst & Young

In an e-mail exchange.

Pre budget expectations: International tax

"Transfer pricing"

"This is another hot bed of litigation owing to several factors. To begin with, in India, not only are taxpayers selected for compulsory audits based on quantitative parameters i.e. international transactions in excess of INR 50 million in a fiscal year (proposed to be increased to INR 150 million), but India also lacks a mechanism of providing for an advance pricing ruling or even safe harbours (whereby defined transactions meeting certain parameters do not come up for scrutiny). These mechanisms need to be introduced at the earliest."

Srinivasa Rao, Partner & National Leader, International Tax Services, Ernst & Young India

In an e-mail exchange.

Budget aspirations of individual tax payers

"There is an urgent need to simplify our tax laws and clarify the tax positions applicable to individuals who are taxable in India on their global income. For example, the Indian tax laws exempt the capital gains derived from sale of long term capital asset when an individual invests the gains in specified assets including a house property."

"Currently, the tax laws do not clearly state whether investments made in a house property outside India will be eligible for this exemption. Given the surge in the number of Indians returning from abroad and foreign nationals working in India, it is imperative for the Government to identify the ambiguities in laws and address them as soon as possible."

Rajesh S, Tax Director, Global Tax Advisory Services, Ernst & Young

In an e-mail exchange.

Pre Budget - Indirect tax expectations

"A Tobin tax is the suggested tax on all trade of currency across borders. The late James Tobin, a Nobel-prize winning economist, was the first to propose a tax on currency speculators, which has since been called the Tobin Tax. Tobin proposed that at each exchange of a currency into another a small tax should be levied on the volume of the transaction. This dissuades speculators as a lot of many investors invest their money in foreign exchange on a very short-term basis. Talks of imposing this tax have been doing the rounds again with economists and industry bodies asking for rationalization of indirect taxes and imposition of this tax."

B Sriram, Associate Director, Global Tax Advisory Services, Ernst & Young

In an e-mail exchange.

Corporate optimism-Budget 2008

"Abolition of dividend distribution tax (DDT) has been a long standing demand on the grounds of economic double taxation. While this may immediately not be a welcome suggestion considering that it is a healthy and efficient contributor to the overall tax collections, the demand for introducing a credit mechanism to alleviate double /multiple DDT impact for holding companies is justified. This could be akin to the erstwhile section 80-M deduction."

Jayesh Sanghvi, Partner, Global Tax Advisory Services, Ernst & Young

In an e-mail exchange.

IT/ITeS Industry

"ITES are treated as ‘taxable’ services per se, whereas software development is treated as a ‘non-taxable’ service. Accordingly, any input service tax or CVD on packaged software imports is ineligible for a refund/credit for software developers unlike ITES players who can claim a credit against their output service tax or pursue a refund in case they enjoy an export exemption. ITES units have also been exempted from issuance of C Forms for securing re-imbursements of central sales tax on their inter-State procurements."

"However, the eligibility of software units to avail such exemptions continues to be challenged by the Revenue. The Special Additional Duty (SAD) in lieu of sales tax which is levied on specified imports by DTA units can be credited against the output excise duty liability of manufacturers and availed as a refund by traders. However, no such credit/refund mechanism is available to service providers in the IT services or ITES segments. Such disparities in treatment across various segments ought to be addressed through appropriate amendments to the relevant laws or issuance of notifications."

Bharat Varadachari, Partner & Industry Leader – Technology, Global Tax Advisory Services, Ernst & Young

In an e-mail exchange.

Real estate – Which way shall the wind blow?

"Claims for largesse from the Finance Minister always abound around this time of the year, and quite often compete with each other. Likely to be at the top are those that relate to the Infrastructure, Real Estate and Information Technology sectors, although it should be said that Real Estate’s claims should rank pari passu with those of the Infrastructure sector. In the draw of straws, one just hopes that the sector does not come up short."

"It is only fair however that the quest for liberty be balanced by regulation for downside protection – India should avert a crisis of the sub-prime kind, as it did the currency crisis of the 90s."

Ashwin Ravindranath, Senior Manager, Global Tax Advisory Services, Ernst & Young

In an e-mail exchange.

Rendezvous with retail

"A natural consequence of the retail sector getting more organized is the spike in demand for prime real estate and the resultant escalation in property lease rentals across the country. If lease rentals alone did not erode, profits, the levy of service tax on such rentals has only worsened matters. In addition to service tax on lease rentals, a typical retailer is subjected to service tax levy on various other services availed such as on security, storage and warehousing, commission and collection agents’ services and transport services. As most retailers are not able to utilize the credit of service tax paid on the input services consumed by them, service tax is an additional cost for them."

KT Chandy, tax partner, Ernst & Young, India

In an e-mail exchange.

Pharma & health sciences sector - FM's unfinished agenda

"On the indirect tax front as well, the industry continues to seek long-sought demands that have been ignored in the past. Industry Bodies have sought customs duty exemption on import of all Life Saving Drugs, reduction in customs duty rate to 5% for Formulations, as well as scientific research equipment."

"As regards the excise regime, the demand for duty exemption on physician samples and reduction in duty rate to 8% on Formulations, continue to be raised by industry players. Further, an increase in the abatement for levy of excise duty on pharmaceuticals to 55% [which is currently 42.5%], has also been sought."

Ravi Vishwanath, Associate Director, Global Tax Advisory Services, Ernst & Young

In an e-mail exchange.

Budget 2008 – Textile industry

"The Indian textile industry has certain inherited unique features, like a fragmented set up, absence of economies of scales, several layers of stakeholders, outdated technology, geographically dispersed set up, etc. These features result in not only cost inefficiencies, but also in tax inefficiencies at several levels due to cascading taxes in the form of Central Sales tax and local taxes."

"Since 2005, after the dismantling of Multi Fibre Agreement, the Indian textile industry is undergoing a complete reorientation. The Indian textile industry is pitted against players from China and other countries both on quality and cost. Year 2007 exposed the textile industry to the vagaries of forex losses - appreciating Rupee against the Dollar. If media reports are to be believed, the hardening Rupee pulled down the industry’s exports by 15% last year."

B Sriram, Associate Director, Global Tax Advisory Services, Ernst & Young

In an e-mail exchange.

Automotive industries

"The rate of abatement for MRP based levy of Automobile spare parts was fixed way back and does not capture the entire margins. Hence the rate should be increased to at least 55%."

"Certain products like Stainless Steel sheets /coil of width more than 600 mm (chapter 7219) suffer customs duty of 7.5% which should be reduced to 5% or even zero."

"R&D cess, a product of pre-liberalization era, levied under R&D Cess Act, 1986 should be abolished to enable technology transfers from global players to their Indian counterparts."

"As part of environmental protection measures, Government should promote alternative fuels like Compressed Natural Gas (CNG)/ Liquefied Petroleum Gas (LPG) and vehicles which comply with higher levels of Bharat and Euro Emission Standards by way of reduction in excise duty on those vehicles and its parts/components etc."

KV Madhan, Associate Director, Global Tax Advisory Services, Ernst & Young

In an e-mail exchange.

Fringe benefit value of securities other than equity shares

"The amended Rule 40C and the new Rule 40D will take effect from the 1st April, 2008 and will, accordingly, apply in relation to the financial year 2007-2008 and subsequent years.In addition to equity shares, companies would now need to determine the FBT liability on any other securities allotted transferred to employees free of cost or at concessional rate."

Rajesh S, Director-Tax, Ernst & Young

In an e-mail exchange.


Q: What is the difference between tax treaties which India has entered into as compared to treaties executed between developed countries?

A: "One difference is that under Indian treaties, while an agent engaged merely in securing orders (but not concluding contracts) could constitute a PE in India, treaties of developed countries assume a PE only when the agent is concluding contracts. Under the securing orders concept, virtually every transaction beyond a simple shipment of goods may lead to a PE."

Rajiv Anand, executive director, PricewaterhouseCoopers

In an e-mail exchange.

Banking... before the Budget

Q: Do you suggest any steps/measures for handling the effects of the sub-prime crisis spilling over from abroad?

A: "The most impactful way to address any effects of sub-prime crisis is to continue to support mortgage disbursals. Post RBI’s holding the bank and repo rates unchanged this week, some more tax benefits on housing loans wouldn’t be out of place. It is time the banks themselves have a re-look at their PLRs."

"Some special scheme to ensure flow of funds to large housing projects would be another positive step. It is high time, market driven housing indices come into being to bring in some type of price discovery mechanism. Such indices could become 'bell weather' indicators of state of the market. "

Robin Roy, associate director, PricewaterhouseCoopers

In an e-mail exchange.

Withholding taxes

Q: Are the TDS rates too high, or just right?

A: "Not all the rates are high. For example, the rates on salaries mirror the normal tax rate and others, such as on interest or several cross border payments seem to be appropriate. However, it maybe appropriate to reduce the TDS rate on property rental from 20% to 10%, as the recipient is entitled to a standard deduction of 30% on such income as also deduction for interest on funds borrowed for acquiring/reconstructing properties. Removal of surcharges/cesses would also simplify matters, but admittedly that is a function of change in the basic tax regime."

Ketan Dalal, Executive Director, PricewaterhouseCoopers

In an e-mail exchange.

Financial services

Q: What key tax measures concerning the financial services players you would like to see in the budget to provide impetus to the Indian stock markets?

A: "The list is long. (i) Extend benefit of concessional capital gains tax rate and exemption from DDT to Fund of Funds investing in other Equity Funds and Mutual Funds investing in equity derivatives. (ii) Concessional capital gains tax rate be extended to Buyback / Open Offers, etc."

Punit Shah, Leader, Financial Services tax, PricewaterhouseCoopers

In an e-mail exchange.

Retail boom in the indirect tax web

"Though VAT has been implemented across all states (except UP, which has now agreed to implement VAT), there are still tax costs associated with movement of goods from one state to another. In case of inter-state purchase/ sale of goods, the levy of CST at the rate of 3 percent continues, which adds to the overall costs. Further, in case of stock transfer of locally procured goods, there is a certain percentage loss of VAT credit (typically 4 percent) to the business which adds to the overall costs."

"Further, the variance in VAT rates, credit provisions etc amongst states also increases the cost of compliance for retailers having operations in various states."

Varanasi Suresh, Senior Manager, Indirect Tax, KPMG

In an e-mail exchange.

Budget expectations – Indirect tax

"Talking of Customs duty, while some rationalization is warranted in cases where the duty structure is inverted, a further reduction in the peak rate of Customs duty may not be viable in light of the appreciating value of Rupee against Dollar which has anyways resulted in relatively cheaper imports. "

"However, this non reduction may result in a sharper duty cut on many key products in the following year if the Government intends to keep up with its currently planned strategy of bringing the average peak rate down to 5% by 2010."

S. Harishanker and Krishan Arora, KPMG

In an e-mail exchange.

Suresh Surana

Q: What is the importance of DTC to Indian Gem & Jewellery Industry?

A: "The diamond industry heavily relies upon the Diamond Trading Company Limited UK (part of De Beers Group for the supply of rough diamonds). DTC supplies about 40% of the rough diamonds in the world. DTC supplies rough diamonds to a selected number of entities generally known as 'DTC Sightholders' which assures continuous and consitent supplies of rough diamonds. "

Dr. Suresh Surana, a Mumbai based Chartered Accountant and founder of RSM-Astute Group

In an e-mail interview.

Charles A. Lowenhaupt

Q: Do cultural differences play a major role in family wealth? And what are your insights about Indian families?

A: "I have not found cultural differences when considering family and wealth. The opening question is always 'What is the wealth for' - and that must be asked in any culture. There are differences based on where a country is in its wealth cycle. Many Indian families today are where many of our US families were in the 1970s - building booming businesses but facing issues of next generation involvement and succession. "

Mr Charles A. Lowenhaupt, CEO of Lowenhaupt Global Advisors (