05 March 2010;hindustantimes.com:Kamayani Singh:Last month Maruti Suzuki decided to recall one hundred thousand units of its A-Star cars to fix faulty fuel tanks. It turned out to be one of the biggest recalls in Indian history. Earlier, Toyota recalled more than 8.5 million cars mostly in the US to fix gas pedals that allegedly resulted in 34 deaths in the US. Honda, too, decided to recall more than 400,000 cars from all over the world – including 8,500 from India – to mend faulty airbags. While product recalls is a common occurrence in the US, it’s somewhat unique in India. Indians became part of a large-scale product recall, perhaps for the first time in 2007, when Nokia decided to take back 46 million of its cell phone batteries globally. Although the reasons behind every recall are different, if a company decides to recall products even before the consumer discovers a defect – as in the case of Maruti’s A-Star cars – it goes to show how businesses are becoming conscious of their image and trustworthiness. “The Indian consumer, who may have lived with minor defects a couple of decades ago, is more aware and demanding now,” said Santosh Sood, a Delhi-based independent brand consultant. Legal support In recent years, consumer courts across India have been flooded with complaints. Government campaigns, such as Jaago Grahak Jaago, have also helped increase consumer rights awareness. But most cases take years to be settled and the consumer ends up spending more money on legal processes than the compensation he applied for. Consumer courts came up in India after the Consumer Protection Act of 1986 was enforced. At least 33 lakh cases have since been filed in different district and state consumer courts and the National Consumer Disputes Redressal Commission. Although 29.5 lakh cases have been settled so far, the time they take keeps getting longer. “The number of cases getting filed in consumer courts was negligible in the 1990s, but it has increased in the last few years,” said Nitin Saxena, a Delhi-based consumer activist. The district consumer commissions in Delhi receive on average 150 complaints a week and the state consumer commission gets 15 complaints a day. But in most years, only one-fifth of the cases end up seeing the light of day. Although the Consumer Protection Act stipulates that each case must be settled in 90 days, most cases take between one year and four years to be settled. “When I filed the case, I had no idea about how consumer courts work. The government needs to create more awareness regarding this,” said Rajesh Yadav, who filed a complaint against ICICI Bank in 2006 and won the case. He said, “Although my case took a year to get settled, most take three-four years. The courts must get equipped to process more cases.” No real power Bejon Misra, chairman, cell for consumer education and advocacy, an organization that works for consumer rights, however, said the Indian consumer had no real power. “While companies impose heavy penalties for late payment, there is no penalty if the company fails to address a complaint.” He said the consumer would not have to go to the court so often if companies take the lead in addressing most complaints internally. Experts say maximum number of cases in the consumer courts is against banking, telecommunication and insurance companies. An official of telecom service provider Airtel said on condition of anonymity that the company “has taken steps to empower customers… These measures help deal with complaints effectively”. But Misra said, “There need to be greater monitoring by the government and its regulatory bodies. The RBI (Reserve Bank of India) and the TRAI (Telecom Regulatory Authority of India) should be given the power to probe if there are a high number of consumer complaints in the banking or telecom space.” In November 2007, the Delhi State Consumer Disputes Redressal Commission slapped a fine of Rs 55 lakh on ICICI Bank for using recovery agents to beat up the owner of a car who had defaulted on his car loan. The agents had not bothered to confirm the identity of the owner and ended up beating up a wrong person, who was hospitalized for two weeks. “From what I know, ICICI Bank has challenged the order and the complainant still hasn’t been compensated,” said Misra. In the US, government bodies, such as Consumer Product Safety Commission and National Highway Traffic Safety Administration, maintain online databanks on products that have been recalled. Their websites help the consumer make an informed decision and register complaints. As the recall by Maruti Suzuki made headlines at home, Sood said, “The consumer may forgive Maruti this time, as it took the initiative to admit the fault.” But he said, “As confidence in a company grows, the consumer becomes less forgiving with every subsequent mistake.”
Private lenders hike auto loan rates, end spl schemes
05 March 2010;dailypioneer.com:Mumbai: Country’s two leading private lenders ICICI Bank and HDFC Bank on Thursday raised lending rates for auto loans, in a clear signal that rates would harden in the coming days. Mortgage major HDFC and ICICI Bank also discontinued with their special home loan schemes, which offer lower interest (teaser) rate for the first few years of the credit period. An HDFC spokesperson when contacted confirmed to the news agency that the lender is not continuing with the special offer which was valid only up to February 27. Country’s largest private sector lender ICICI Bank also said it has hiked auto loan rates by up to 50 basis points. It withdrew the 8.25 per cent special home-loan scheme. The Reserve Bank had expressed displeasure at teaser rates as it discriminates existing borrowers against new ones. “Auto loans rates have been raised by 0.25-0.50 per cent depending on segment and tenor with effect from March 5,” an ICICI Bank spokesperson said. With this hike, lending rates for new auto loans will now be in the 9.75-11 per cent range. HDFC Bank hiked auto loan rate by up to 100 basis points. Industry experts said that the rate hike was largely prompted by signals communicated by the Reserve Bank in its last monetary policy review on January 29. RBI hiked the cash reserve ratio or the mandatory amount banks have to keep with RBI by 0.75 per cent to 5.75 per cent, absorbing Rs 36,000 crore from the system. Kotak Mahindra Bank and the group’s car-loan financing arm also announced hikes in home and car-loan rates on Thursday.
04 March 2010;deccanherald.com:The issue of rolling back oil prices is as good as over with Congress president Sonia Gandhi on Thursday praising Finance Minister Pranab Mukherjee for his deft handling of the Union Budget. Gandhi, who was addressing the Congress Parliamentary Party, did not even refer to the oil price hike effected in the budget or the Opposition demand for its rollback. Nor she made mention of her allies, two of whom (Trinamool Congress and DMK) had sought a rollback of the hike. Backing the Budget proposals and indicating that she fully supported the government on the fuel price hike, Gandhi said: “We have many essential social obligations and to meet them it is necessary to raise resources. I congratulate the Finance Minister for a fine and delicate balancing act, which has been widely welcomed”. In another message that the party was fully behind the government on the Women’s Reservation Bill, being taken up in Rajya Sabha on Monday, Sonia Gandhi said she accorded the “highest importance” to it. “It would be a gift to the women of India if it is passed on Monday itself. March 8 happens to be International Women’s Day. On food prices, she said keeping a check on it continues to be “our foremost priority”. Describing the right to food security as “the most important pledge” in the Congress manifesto last year, Gandhi said, “We are now ready for the next step of placing the draft bill for discussion in the public domain.”
01 March 2010;Aditya Raj Das:New Delhi:There will be no rollback of tax proposals (on petroleum products). If I had to roll back, I would not have gone for this at all. There seems to be some problem, (over the issue) but we will over come this,” he told Deccan Herald. Some of the key allies of the ruling Congress-led UPA government like the DMK and the Trinamool Congress have demanded rollback of the hike in duties on petroleum products which triggered the rise in prices of petrol and diesel. Also, as soon as Mukherjee proposed the hike in duties of petroleum products, the entire Opposition, comprising the BJP as well as the Left parties, walked out of the Lok Sabha. The BJP has already threatened cut motions against the budget proposal. Asked if the Congress’ allies would join the Opposition for the cut motion and the choice before the government, Mukherjee shot back: “In that case, the Budget will collapse. The Finance Bill will collapse. It would mean the government will fall…Nobody wants this (type of situation to happen).”But after a pause, Mukherjee said: “In a democratic set-up, there is always a mechanism to resolve the problem...Our allies will finally understand under what circumstances we have taken this measure (of hiking duty on petroleum products).” Explaining the rationale behind the duty hike, he said: “Last year, we faced a difficult time because of the global slowdown. We had to give out duty concessions to help the economy back to the growth path. Now there is recovery in the economy.”Pointing out that the task now was to “put the economy on the path of fiscal consolidation”, Mukherjee said there was need for expansion in revenue collection. “That is one of the reasons why we went for some duty hike.” Asked how the government would implement the Kirit Parikh Panel recommending deregulation of petro prices, he said: “One should not mix up the issues. The report has been submitted and it is being studied. The government will firm up its view in a democratic manner.”When pointed out that in his I-T proposals, he was quite generous towards the middle class with no concern for the lower income group, he said: “This is not true. The exemption limit stands at Rs 1,60,000. If you calculate overall tax savings instruments, which has now gone up to Rs 1,20,000, the total income exempted from tax net stands at Rs 2,80,000. Roughly one can say a monthly income up to near about Rs 25,000 is not taxed. When you raise the I-T slabs people staying little above the border line sometimes get some benefit.”
CPI demands rollback of duties on petroleum products
01 March 2010;hindustantimes.com:New Delhi: CPI on Sunday demanded that the government rollback the imposition of duties on petroleum products immediately, saying it will have adverse impact on the people who are already suffering due to rising food prices.Party National Secretary D Raja also alleged that the Budget 2010-11 has "neglected" the agriculture sector despite tall claims by Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee that the UPA government’s top priority was agriculture."The Finance Minister should roll back the duties imposed on petroleum products. He should do it immediately... The government should have maintained some sort of transparency on the issue," he said."On Thursday, a day before the Budget, the Parliament was debating price rise and the government assured that it was taking steps to contain it."The next day it imposes duties on petroleum products. The government should have been honest," he said.The Rajya Sabha MP also said the Budget reflected the government’s policies of following the new liberalised economy."The Finance Minister has imposed a number of indirect taxes. It will lead to free market economy," he said.Raja said the government should also take steps to contain inflation, which has led to skyrocketing of food prices in the country.
01 March 2010;timesofindia.indiatimes.com:CHENNAI: The Union government’s notification on February 19 imposing anti-dumping duty of $35-$40 on radial truck and bus tyres from China and Thailand, and restrictions on import, has the industry divided. Ashok Leyland and Tata Motors, who are facing the heat, alleged that the tyre manufacturers were diverting their supplies to the replacement or retail market, where they are able to make better margins. Tata Motors has indicated that shortage of radial tyres has forced them to cut down production between 5% and 10%. Officials at Ashok Leyland hinted that their production could be down by 10-15%. The tyre replacement market in the commercial vehicle segment in India constitutes about 90% of the tyre supplies. On November 24, 2008, the ministry of commerce imposed quantitative restrictions on import of Chinese and Thai radials. Till November 2008, India was importing about 1.3 lakh tyres per month but following the restrictions, import has fallen to 10,000 tyres per month, according to S P Singh, convenor, All India Tyre Dealers’ Federation (AITDF). The demand is about 40 lakh radial tyres per annum. “The market requirement for radial tyres has grown to about 4-5 lakh tyres per month in the replacement market, the production in India is just around 50,000 per month.”
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