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BENGALURU | 24 PAGES | .̀ 3.50 ONLY THURSDAY, 10 MARCH 2016BENNETT, COLEMAN & CO. LTD.THE ECONOMIC TIMES
WWW.ECONOMICTIMES.COM
Govt RemouldsEPF Clay to BuildBig Pension PotCos may’ve to route
most of their share
toward retirement
savings into EPS
New Delhi: Finance MinisterArun Jaitley may have been for-ced to back down on taxingEmployees’ Provident Fund(EPF) withdrawals a week afterintroducing the measure in theBudget, but the governmenthas not given up on the goal ofcreating a pensioned society.
It’s now considering a propo-sal to make it mandatory foremployers to route most of the-ir share toward the retirementsavings of employees into theEmployee Pension Scheme(EPS) rather than EPF for emp-loyees above the salary thres-hold of .̀ 15,000 per month, an of-ficial said. A private sectoremployer matches contribu-tions made by an employee toEPF – 12% of basic salary byeach. While all of the employe-e’s contribution goes to EPF,8.33% of the employer’s pay-ment goes to EPS subject to amaximum of .̀ 1,250 a month.
That’s 8.33% of .̀ 15,000, the sta-tutory limit for contributions.
MOVING TOWARDS A PENSIONED SOCIETY
Rebuffing Monsanto, the
Centre has capped price
of Bt cotton seeds. A
notification issued late
Wednesday recommend-
ed that Bt cotton packets
of 450 gm be sold at .̀ 635
for Bollgard I & .̀ 800 for
Bollgard II, reports
Madhvi Sally.��13
Bt CottonSeed PricesCapped
GOVT MULLING A PROPOSAL TO RAISE CONTRIBUTION TO PENSION SCHEME
Employee contribution Entire 12% of salary to EPF
Employer contributionOf total 12% of salary: 8.33% (subject to cap of `1250/pm) to Employee Pension Scheme (EPS) + Balance to EPF
CURRENT STATE
SUGGESTIONLift `1,250/pm cap and entire 8.33% of salary to go to EPS
Balance 3.67% can go to EPF
HOW DOES IT HELP
Higher monthly pension for subscriber
Component that goes to EPF will fall
The contribution to pension scheme will increase
Less available for tax-free withdrawal
More For Pension?
NOOSE TIGHTENS Lenders draw up plan to sell pledged assets while govt vows to take all steps, includingseeking extradition, to bring Mallya back. But SC refuses to order his presence at next hearing
The govt will use all re-
sources including extradition
treaty to bring Mallya back if
he is found guilty by the
courts, a senior finance
ministry official told Dheeraj
Tiwari. Govt may also re-
quest UK to ensure he doesn’t
get Diageo payout. ��14
Govt Vows toBring MallyaBack Home
17 banks met a senior law-
yer on Feb 28, and were
advised to immediately
approach courts to pre-empt
any move by Mallya to leave
the country. Their dilly-
dallying may have provided
him with a window, reports
Samanwaya Rautray.��14
Delay by Banksmay’ve Helpedthe ‘King’ Fly
Sangita Mehta, Saloni Shukla& Maulik Vyas
Mumbai: Vijay Mallya’s creditorsplan to intensify efforts to recover du-es worth .̀ 9,000 crore by selling assetspledged by him but banks failed toconvince the Supreme Court to orderhis presence at the next hearing of the-ir case against the businessman. At-torney-General Mukul Rohatgi saidMallya was most likely in London, ha-ving left the country a week ago.
The government will take all steps,including seeking extradition if requ-ired, to bring Mallya back, said a se-nior finance ministry official late on
Wednesday. Indiamay also ask the UKgovernment to ensu-re that a $75-millionpayment from Diae-go to Mallya is with-held, he said.
CBI officials mean-while said Mallyahad left the countrydespite a lookout no-tice issued at theagency’s request bythe immigration aut-horities last year. So-urces at the agencysaid Mallya had beenquestioned thrice.
Lenders led by IDBIBank are poised to try and recover at le-ast .̀1,000 crore by selling shares of Uni-ted Spirits, owned by United BreweriesHoldings (UBHL), which guaranteedthe airline’s loans. The case comes upfor hearing in the Karnataka High Co-urt on March 30. State Bank of Indiaproposes to attach another .̀1,500 croreof liquid assets, including financial in-vestments and jewellery, two personsaware of the development said.
Risk in Squeezing Too Tight��18
Moves Afoot to Get Ridof Nasty Mallya Hangover
Mallya hadgiven banks in2012 a list ofpersonalholdings of.̀1,500 crorethat includesequity stakes,jewellery and cash
PURE POLITICS
Comptroller &
Auditor General
has opened a
window which
could allow for a
government audit
of private
deemed to be
universities. CAG is learnt to have
told the HRD ministry that there are
provisions in the CAG Act under
which a proposal for auditing the
deemed varsities can be considered,
reports Anubhuti Vishnoi.��4
CAG can AuditPrivate DeemedUniversities
Noting that con-
struction work for
the Art of Living
(AOL) Founda-
tion’s mammoth
three-day cultural
festival has “dras-
tically tampered”
the Yamuna river’s flood plains, the
National Green Tribunal on Wednes-
day slapped a fine of .̀ 5 crore on the
foundation while allowing it to go
ahead with the event, reports Our
Political Bureau.��4
NGT Fines Art ofLiving .̀ 5 cr, GivesNod for Event
What The Study SaysKarnataka
Rajasthan
Uttarakhand
Bihar
Telangana
Madhya Pradesh
Puducherry
Chhatisgarh
NUMBER OF PRIVATE SCHOOLSNOTICES ISSUED SCHOOLS CLOSED
2 (in Bengaluru) 4 (in Yadgir)
105
1 1
7,00027
0
0
212k0 4k 6k 8k 10k 12k 14k
Hyderabad: A few months after Indi-an startups set records in hiring frompremier engineering and manage-ment schools, some have begun to re-nege on their offers or are markingdown salaries.
Hiring by startups at college campu-ses during the November-January pla-cement season had surged as emergingbusinesses competed to recruit the besttalent, but the recent funding crunch isforcing them to focus on profitabilityand paring costs. Investors weary ofstartups burning their cash too fastwithout building solid businesses haveincreased pressure on them to clean upand improve their strategies, and hi-ring has become a big casualty of this.
Ola and Snapdeal Absent��20
Cash-Savvy StartupsTweak Hiring Policy
ON DEBT ROWTHE HOLE`9,000 crore loans to Kingfisher AirlinesTHE LONG ROPEAs per SBI Caps’ advice, banks rejigged loans in 2010 to give KFA second chanceTHE DAMAGELoans turned NPAs in Jan 2012KF GROUNDEDFlying licence suspended in Oct 2012BANKS PULL PLUGBegin selling shares of UB, USL & Mangalore ChemMONEY SALVAGEDAbout `1,100 crore by selling shares; another `650 crore parked with Karnataka HCNEXT MOVEBanks to auction Kingfisher House on March 17
OPTIONS & HURDLESCHARGES: Money laundering, PF & service tax default, violations under Prevention of Corruption Act
Order for invocation of guarantees by UB and Mallya will allow more share sale but it’s time-consuming
Court can declarehim ‘judgement debtor’ & issue arrest warrant, but extradition a far cry
Banks can moveUK court, but Mallya’s assets are ringfenced abroad in complex trusts
Like Lalit Modi, Mallya (an NRI) may prefer staying away
KFA STAFFSTILL AWAITSALARIES��PAGE 14
CALL DROPREPORT:COS GET AWEEK ��PAGE 8
ECOMMERCE LIFTOFF
THE GREAT INDIANParing CostsSECTOR-SPECIFIC SLOWDOWN IN STARTUP HIRING (Q4 FY15)
Contact Centres
85% drop
Engineering
75% drop
Operations
60% drop
Sales
60% drop
Source: Jombay
Stayzilla delayed joining date for 39 ISB-Hyd students to Jul-Aug from Apr-May & also lowered salary packages
In some cases, ‘corrections’ caught students & institutes unaware when they noticed revisions in final letters
After hiring spree at campuses, cos begin to back out
Blackstone and Apollo
Global have emerged
strong contenders to buy
Mphasis and have sub-
mitted binding offers.
Tech Mahindra, potential-
ly the strongest conten-
der, has opted out, report
Anirban Sen, Indulal PM
& Arijit Barman.��14
TechM Outof Race forMphasis
Hindustan Unilever has settled a 15-year-old dispute
with former workers affected with mercury poison-
ing at Kodaikanal in Tamil Nadu. Activists, however,
warned that their issue with HUL isn't fully resolved.�� 8
HUL Settles Row with Ex-Staff
The weather office has issued a “multi-
hazard warning” of impending hail-
storms and strong winds that can de-
stroy crops in northern, eastern and
central India in the next few days. (See
economictimes.com)
Met Office Warns ofHail Damage to Crops
SC REFUSESTO ORDERAPPEARANCE��PAGE 14
AN
IRB
AN
Bengaluru: The claim that the Rightto Education Act has resulted in large-scale closure of private schools hasbeen proved wrong by a study conduct-ed by Bengaluru’s Azim Premji Uni-versity. Several associations of privateschools in the country have been resist-ing the landmark legislation thatmakes it mandatory for private schoolsto admit a certain number of studentsfrom economically backward sectionsof society, free of cost. The Act also laysdown minimum standards for ele-mentary education.
As expected, private school associ-ations have objected to the findings ofthe study. The study surveyed 34,756private schools in 69 districts acrosseight states. It was expressly commis-sioned to verify if private schools wereshutting down due to RTE’s stringentnorms, and causing hardship to chil-dren, as claimed.
The study concluded that only fiveprivate schools were found closed - 4 inYadgir district of Karnataka and onein Bageshwar in Uttarakhand. More-over, it could not be established thatRTE was the reason for the closures.
Private Schools Resist RTE Norms��20
Premji Univ Study CallsPvt Schools’ Bluff on RTEStudy states that only five schools were found closed
GEETANJALI
