J MULRAJ

"Since nothing is settled until it is settled right, no matter how unlimited power a man may have, unless he exercises it justly his actions will return to plague him" (Frank Vanderlip). The passing of an ordinance to retain the Rs 350 crore paid by ITC as a deposit in an excise dispute it later won in the Supreme Court, and to enable the government to claim another Rs 450 crore from it, is an example of a dishonest use of power. The ordinance seeks to lay the onus on tobacco major ITC for paying excise duty on the basis of sales by its millions of retailers, who sell cigarettes loose, and not by the pack. The government seeks, retrospectively, to change the basis of collecting the excise duty. All manufacturers ought to shudder, both public and private sector. For they are to be made responsible for their retailers' behaviour in selling their products.

Frequent legislative changes deter investment. The CEO of Societe General, a French Bank willing to take over Bank of Rajasthan, says they would look at doing so if there was a 5-10 year stability in regulation. And if we wish to attract foreign investment in order to provide jobs, then stability, consistency and fairness of laws is a must.

Indirect investment is coming, and was what prompted a rally last week, with Sensex going up 199 points. Corporate results are stunning; as many as 344 firms made higher post-tax profits in first nine months of this year. Among notable performances were ONGC, which made a PAT of Rs 3,490 crore (up 114 per cent ), for a profit margin of 28.8 per cent.

IOC, which was recently judged by Deutsche Bank as one of the top global picks in the oil and gas sector globally, had a growth of 25 per cent in top line, but a drop in profits, thanks to the subsidy burden on LPG/kerosene which ought to come out of the Union Budget but is being tucked away in public sector oil companies.

Perhaps if rating agencies were to add this to the fiscal deficit and ask the government to mend its ways, this would change.