India Business Blog | Finance Telecom Stock Market & Entertainment» tax payers

Is Air India turning into Grave India?

Arun Prabhudesai — Sat, 24 Oct 2009 05:33:53 +0000

Making News as some say is an art. Air India seems to have earned a doctorate in making news albeit for all wrong reasons.

The recent news that made it big and needed intervention from the government was the pilots going on Strike to protest pay cuts.

The strike led to furor and caused the already ailing Air India to lose millions in cancelled flights. More than the monetary loss, Air India got its share of bad publicity. Need I say this that bad publicity in the Airline business is never good, specially in the Indian subcontinent with cut throat competition. As if the the strike was not enough, Air India staff has ensured that Air India stays in the news and this time for reasons that are all the more worrisome.

Another incident, where Air India pilot and the co-pilot onboard the flight from Sharjah to Delhi, got into a mid-air scuffle with a young air hostess and other cabin crew. The incident has fuelled enough rumors for the media to get active.

According to a Business Week report, the airhostess was assaulted by pilots and pushed out of the cockpit. What supposedly happened after that is really shocking!!

Presumably, the pilots followed the air hostess into the passenger cabin leaving the cockpit unarmed. Air India has however denied the claim and the actual details are yet to clarified.

Without delving on whether the pilots actually left the cockpit putting the lives of passengers at stake, IMO it is only true that rumours also have some element of truth behind them. If the pilots did leave the cockpit leaving the aircraft at the mercy of god knows who, the issue hardly remains a matter of Assault on a colleague, it becomes a grievous Security Issue.

Air India has come out and promised a "regular department inquiry" to get to the depth of the matter. But, will the airline be able to restore its lost reputation and customers faith in flying Air India. I have my doubts.

On top of all this, Air India has been bleeding badly and talks are on with the government to bail it out. Yes,the airline sector as a whole is suffering. Being a government backed airline, it is government’s responsibility to ensure that Air India survives.

But, does that give Air India the right to act like a spoiled brat like it is. Even if the employees are at fault, it is the management’s responsibility to ensure decorum and ethics.

Air India has been doing all it can to dig itself deeper into the grave. What with a strike, rat on board , a fire and now a assault/safety crisis. Even if we forget the losses of the airline, these kind of incidents are truly a matter of national shame for the Air India brand has been synonymous with "Carrier of India" before the private carriers made inroads.

For all the news that Air India that it has made, I just have one question in my mind

Should the government actually bail the airline out with the taxpayers money??

The government cannot just give millions of rupees to bail out the airline and hope that the airline will get its act together. The way I see it, given the theatrics I am skeptical if the existing management has crossed the line which is beyond correction.

Why can’t the government work on a partnership / stake sale model which can help bring a seasoned management team on board Air India. Drastic measures are needed to get the airline out of the grave and money is definitely not going to do any good.

The Air India Brand is near destruction and strict measures are needed to restore the public’s faith in the airline. The sarkari babu type operations are not going to help re-build the image.

On a humorous note,

If the above rumours turn out to be true and the cockpit was left unmanned, Will the government officials (mandated to travel Air India) will be willing to put their lives on stake :)

[This post has been written by Ankit Agarwal, an ERP Consultant by profession, a wannabe entrepreneur and stock market stalker by passion]

Share & Bookmark

Author: Arun Prabhudesai

Arun Prabhudesai is founder / chief editor at trak.in. He jumped the Entrepreneurship bandwagon in early 2008 after a long 13 year stint in I.T Industry. You can follow him on twitter @trakin or get in touch with him at admin-at-trak-dot-in or 91.9822575676.

Not Jet nor Air India – Its now all India Airline Employee Union
What started as firing of 3 pilots of Jet Airways for starting a trade Union has catapulted into a huge...
Jet Airways Standoff – Who is Right & Who is wrong ?
The standoff has entered into its 4th day. The main sufferers of this strike are passengers and no else. Think...
Private airlines wants a bailout – And why not?
Air India asked for a 20000 crore bail out. That is a lot of money. In all the likelihood it...
Air India To Fly An All Women Crew!! Brand Building ?
Just when you thought that Air India has not been in the news for sometime, here it is albeit this...
OMFG! 2009 is worse
I wished everybody a Happy New Year. I was also celebrating that 2008 is over. My new year wishes are...

Finance Friday: Watch out for the gifts you receive or Mr.Income Tax may haunt you

Arun Prabhudesai — Fri, 02 Oct 2009 10:36:34 +0000

Before we even start on discussing lets just salute the brilliant folks manning the Indian Finance Ministry – They have pulled out another rabbit from the hat which will fill the government coffers in the form of taxes.

Ironically, the Direct tax code introduced a while back was hugely applauded for it’s AAM Admi friendliness. What with increasing the minimum tax slabs and the likes. But, the government kept its side of the bargain by taking away Home Loan from the tax exemption bracket and the likes. So, the Indian citizen was always left at crossroads.

Starting October 1st, and you better watch out for the gifts that you are receive (or dream or receiving).

Yes, the government has made amends to the Gift Tax which requires the taxpayer to pay a tax for accepting any gifts worth Rs 50,000 or above. Yes, you heard me right. So, if you are awaiting that expensive gift from your U.S returning friend, better calculate the tax you will subjected to – The tax liability will be calculated at the total price and not the balance. So, do your math or you might end up paying dearly for receiving a gift.

For example: For a Rs 5,00,000 car received from a friend, the receiver would have to pay tax up to Rs 1,50,000 (flat 30%) , if his or her income falls in the highest tax bracket of 30 per cent.

All is not lost however. Here are some of the fine prints which can help you decide if accepting a gift is going to be an economically viable idea after all.

It is no longer the giver of gifts who will be taxed, but the one who receives it will be!
The only times when you are exempt from these rules are if the gifts are made by relatives, exchanged during marriage ceremonies or fall to your lot under the prescriptions of a will.
The definition of gifts under consideration goes beyond the scope of cash to include non cash assets like property, shares and securities etc.
If your total gifts exceed the value of Rs 50, 000, then you have to pay tax on the entire amount and not simply on the difference

It is equally to understand who are considered your relatives under the Gift Tax. According to Section 56 of the I-T Act, a relative would include:

Spouse of individual; Brother or sister of individual; Brother or sister of spouse of individual; Brother or sister of either of parents of individual; Any lineal ascendant or descendant of individual; Any lineal ascendant or descendant of spouse of individual; Spouse of persons referred to above.

For more detail, head over to the national Income Tax Site (Gift tax) section

Now you will have to think twice even while receiving gifts :) what’s your take on this new tax policy?

[This post has been written by Ankit Agarwal, an ERP Consultant by profession, a wannabe entrepreneur and stock market stalker by passion]

Share & Bookmark

Author: Arun Prabhudesai

The richest are the biggest defaulters in Income Tax payment.
The top 1% of the Taxpayers which include major corporates, rich individuals and other High Networth individuals owe government a...
Finance Friday:Crowning Glory For ONGC,SAIL and NTPC
The government has recently upgraded the status of three PSU’s from ‘Navratna’ to ‘Maharatna’ .What this means in layman’s language...
Finance Friday: Who Made You The Maximum Money In The Stock Market This Year
This year has been a see-saw ride as far as the Stock Markets are concerned. The Markets witnessed one of...
Finance Friday: India News Digest
Finance Friday is our weekly round up of buzzing stories relating to Finance and Indian Stock Market Inflation dips...
Finance Friday:The Great PSU sale is on, Government To Raise Crores
Lo and Behold!! The Indian Government is all geared up for the sale of a lifetime.What’s on offer here? A...

Here’s a quick look at earnings of Indian people.

Arun Prabhudesai — Thu, 13 Sep 2007 21:08:09 +0000

The income levels of Indians have increased phenomenally over last few years and so is the standard of living. The economy is on the rise and India is coming out from being called a third world country to a developing country.

What does this mean? What are the Indian income levels? How much is the income growing year on year?

Here are some of the answers based on the survey conducted by CLSA:

Over 70m households (34% of total) earn Rs. 80,000 to Rs. 18,00,000 per annum
Six hundred thousand households earn more than Rs. 18,00,000 per annum.
Households earning between Rs. 80,000 – Rs. 18,00,000 to hit 106m by 2010
Market researchers believe that household income is massively understated – baggage of the era of controls and usurious taxes
Independent studies suggest 1.6 million households earn over Rs 40 lakh per annum and about 100,000 people have more than Rs. 4 crore in assets.
Real Incomes increased by 12%; However, real GDP per capita has grown at 10% over FY02-07.
50% of the people have seen incomes rise in the past 12 months; 9% have seen their Incomes decline.
Of those with income increases, one-third saw a more than 10% rise.
Average rise in income was lowest in west India at 10% and highest in the east at 18%.
63% expect their incomes to rise in the next 12 months; average expected increase is 12.7%
83% of people believe that they are better off than 10 years ago 84% expect further improvement in their lives over the next five years

I agree with the independent studies that ‘1.6 million households earn over Rs 40 lakh per annum and about 100,000 people have more than Rs. 4 crore in assets’. Although, the figures may look big, it is the reality. It is estimated that black money floating in the market is more than 40% of our GDP amounting to more than $400 billion. Where is all that money?

Share & Bookmark

Author: Arun Prabhudesai

What is the average earnings of a Non Resident Indian ?
I was very surprised to see the survey published Juxt Consultant on Non Resident Indians. The survey gave details on...
10 facts you should know about Indian middle class
Indian middle class is growing fast, real fast. It is not the same what it was just a decade back....
The Future of Rupee: Indian people getting richer
Out of 103 people who responded to the poll: 40.6 % responded saying that the rupee will remain range bound...
How India Earns, Spends and Saves
India's economy is growing at fast pace, so are the earnings of Indians. A single visit to a Mall or...
Indian IT professional’s salary increase one of the highest in world !
According to recently released Dataquest 2007 salary survey, typical Indian software professional got an average salary increase of 18.7% in...

Biometric PAN cards: Is Mr. Chidambaram too ambitious ?

Arun Prabhudesai — Tue, 17 Jul 2007 16:48:23 +0000

Biometric PAN cards will be arriving in India by year end!. Yes, thats what Mr. P Chidambaram told the news reporters today. When I read this news in Business Standard, I had mixed feelings. The two questions that came to my mind were,

Is it possible ? and will it serve any purpose ?

I’d be happiest if both t he questions have positive answers, but I do have my doubts. Lets analyze -

What are BIOMETRIC PAN CARDS ?
In short, your unique body traits such as your fingerprints or your iris (retinal scan) will be used as your identification to carry out many of the activities such as tax filing, opening a bank account, carrying out registrations and hundreds of such other things.

Will Biometric Pan cards become a reality?
No- not at least in the near future !
I am not saying that they will not be implemented soon, but after implementation to actual utilization may take a long long time. Think about just one issue: Every Govt. office will need a gadget to identify the BIOMETRIC PAN cards- not only Government offices, but every banker and Institution where PAN card is required. The other issue is that a person will have to travel to offices everytime for his identification. One will not be able to post his application like he does now. Now thats a real pain. There are host of other problems that need to be tackled and thought about. Can these issues be overcome in matter of months ?

I doubt.

Share & Bookmark

Author: Arun Prabhudesai

Biometric PAN cards could soon be a reality
After biometric passports the action moved to PAN cards. The income tax department has decided to issue biometric PAN cards...
Calling cards coming to India
Calling cards are quite a rage for Indians living abroad. They use it for calling India, as calling from a...
Indian Credit Cards – Think before you consider taking one !
After living in US for more than 4 years, I am used to paying by credit cards 95% of the...
Who likes credit cards anyway?
Bankers hate it. Merchants hate it. Informed consumers hate it. Bankers hate it because it is not making any money....
Identity Theft – Will it be the downside of Unique ID Project?
There are so many articles surrounding the advantages of National UID system in India. Here are some of the advantages...

Which is the most business friendly city in India ?

Arun Prabhudesai — Thu, 10 May 2007 02:48:18 +0000

In my earlier post I have given details about the time, effort and paperwork required to start a business in India. Even though India is ranked a lowly 134th in the world, it has been getting better progressively for last few years. According to a new report entitled Five reforms reduced the time, cost, and hassle for businesses in India to comply with legal and administrative requirements, placing the country in the top 20 reformers worldwide.

Of the 12 major Indian cities covered by the report, Hyderabad has the most business-friendly regulations, followed by Bangalore and Jaipur. Mumbai came in second-to-last and Calcutta last, as these cities impose the most complex and costly business regulations. Bhubaneshwar, Chandigargh, Chennai, Lucknow, New Delhi, Patna and Ranchi rank in the middle. Typically, large urban centers such as Mumbai and Calcutta have a high volume of business, so regulatory and adminstrative bottlenecks there create serious congestion.

The report also compares business regulations in South Asia with 175 economies around the world. India, the region’s top reformer, implemented reforms to simplify business registration, cross-border trade, and payment of taxes, as well as to ease access to credit and strengthen investor protection. Although the reforms improved India’s ranking over last year’s, it still ranks relatively low at 134 and stands 41 places after China, which is reforming at a faster pace. The top-ranked countries in the region are the Maldives (53) and Pakistan (74), followed by Bangladesh (88), Sri Lanka (89), Nepal (100), India (134), Bhutan (138), and Afghanistan (162).

India has made significant improvements in reducing the amount of red tape entrepreneurs face daily. It now takes, for example, 35 days to register a business in Mumbai, compared with 71 days a year ago and 89 days in 2004. But despite clear improvements in five out of 10 Doing Business indicators, India can do much better,” said Caralee McLiesh, an author of the Doing Business in South Asia report.

Doing business among Indian cities. For example, in Hyderabad it only takes 35 days to register property, compared to New Delhi, where it takes almost four times as long (138 days), or to Calcutta, where it takes almost five times as long (155 days). Within India, it is fastest to import and export goods through the Chennai and Calcutta ports, as opposed to through Mumbai.

States can learn from each other in the areas of business regulation. For example, it is easiest to start a business in Jaipur. Closing a business is easiest in Bangalore, while registering a property is easiest in Hyderabad.

[TABLE=5]

Share & Bookmark

Author: Arun Prabhudesai

Bangalore: Best city to do business in the wired world…Really?
CNN’s Business 2.0 has mentioned Bangalore as the best city to do business in the wired world. To be honest,...
Doing Business in India: Comprehensive Report
A detailed and comprehensive look at doing business in India that talks about business regulations and their enforcement across India....
Pune all set to become the 7th Indian metro city
There are total 6 metro cities in India. Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad. The population in these cities...
IIM-A ranked best business school by Zee Business Best B School Survey
Trak.in does get a lot of traffic on the post I published last year on India’s top Business Schools. That...
Information needed to start business in India – A Factfile !
Did you know that it takes 35 days to start a business in India ? and India is ranked 134th...