High lease tax upsets IA acquisition plans

Indian Airlines is doing a re-think on its plans to dry-lease two A320 and three A310 aircraft this winter to add fresh capacity. The national carrier is also examining afresh its efforts to sell and lease back 12 of its Boeing 737, currently operated by its subsidiary, Alliance Air. The airline floated global tenders some months ago for leasing of the aircraft. However, with the reimposition of the 48 per cent tax on leasing of aircraft, the cost will spiral making it uneconomical to acquire planes by this route.

Auto industry hit by lower offtake in July

The continuing slowdown in industrial growth and the lack of cheap financing has affected the performance of the automobile industry in July. Most industry majors have witnessed a lower offtake of products and the trend is very pronounced among trucks and commercial vehicles manufacturers. There has been massive fall in the sales of heavy, medium and light commercial vehicles during July. Telco has been the worst hit by the trend.

Marked rise in bank credit to small sector

Outstanding bank credit to the smallscale industries (SSIs) sector has almost doubled in the past six years from Rs. 16,783 crores in March 1991 to Rs. 31,542 crores in March 1997. according to the RBI. In addition, credit disbursed to SSIs by agencies other than public sector banks, such as, banks in private sector — Indian and foreign, urban banks, regional rural banks and SIDBI also increased substantially from Rs. 7,330 crores in 1994 to Rs. 13,207 crores in 1996. Assistance provided by SIDBI under various schemes has more than doubled between 1991-92 and 1995-96 from Rs. 2,028 crores to Rs. 4,796 crores.