The Hindu Business Line : Do pre-Budget memoranda serve any purpose?

STORY so far: After the disastrous earthquake that struck J&K, the company joined hands in the relief operations by supplying the much-need pharma items. At the same time, Gupta and I visit a herbal remedies research unit of Ha-Keem, a company in Kashmir, lined up as a possible acquisition, and ensure that structures are quake proof. We also visit a few of the branches and factories to check the extent of preparedness for the deadly tectonic movements.

Episode 115

It was a few weeks ago that I had left with you the question if it wasn't time that our structures, both residential and commercial, accounted for risks that can arise from natural calamities, be they flood or quake. G. Naganathan, a CA, suggests that there can be accelerated tax breaks for quake-proofing of buildings. In Japan, the Land, Infrastructure and Transport Ministry has proposed deducting up to 10 per cent from the income-tax and 3 per cent from the residency tax for those who spend a maximum of 2 million yen on making older houses more earthquake-resistant, he writes citing The Japan Times. Should the state provide an incentive for people to save their own lives, I wonder?

Even as I write this, http://autofeed.msn.co.in reports the death of eight labourers in Delhi; it seems the basement of an incomplete building collapsed, and 20 more labourers are feared to be trapped. "Construction workers allege that the company they were working for flouted basic safety rules. `The engineer pushed us into this work. Had he not done so, this incident would not have happened,' said Shyam, a labourer," the site states, citing NDTV. Shouldn't there be a stiff penalty for not following safety norms, rather than a tax benefit for following the norms?

"The severe earthquake that hit Pakistan and India should be an eye-opener to those involved in the construction industry," reads a mail from veteran architect C. H. Gopinatha Rao. "After the Bhuj earthquake in 2001,the Government divided India into five seismic zones, specifying the range of earthquake that can probably occur. The Ministry of Urban Development in its notification No.K12016/5/79 DDIA/VA/IB(P) dated 21-3-2001 suggested modification in BIS Code and rules and regulations that should govern all buildings in urban areas."

Rao points out that each building in an urban area should be structurally designed by a registered professional engineer who shall be designated as Structural Engineer on record, who has to sign all building plans submitted to the city authorities for approval and for obtaining completion certificate.

It seems a stability certificate is a must; it should state that the building has been designed according to the provisions of the latest building byelaws and codes. "Along with general notes, the structural drawings need to give full information on the soil parameters, safe bearing capacity of soil adopted, live loads, wind loads, earthquake loads and provisions for additional loads if any."

There are rules that insist that professionals supervise construction, and that each construction site of a major project be fully equipped with a laboratory to conduct tests of all construction materials. Law hasn't lost sight of quality control and a quality audit for construction of major projects; only, these have to be applied to smaller constructions too. Do you know that if the structural design submitted by the Structural Engineer/Architect is found to be faulty, their registration/ license can be cancelled and that they stand the risk of being blacklisted, as done in the case of contractors?

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Tsunami revisited

LAST week, Chandru and I made a trip to Nagapattinam, where we had gone after the killer tsunami last year to participate in relief work (Episode 100: `It is a disaster when we refuse to meet calamity head-on,' January 3, 2005). We had the occasion to meet the ever-active collector Radhakrishnan at a photo exhibition on the devastation.

Some of the projects that started in the makeshift camp were getting institutionalised.

For instance, the children who had attended the art and craft classes, during those dark days when death lay strewn on the shores, had greeting cards on sale. Chandru bought a consignment for Rs 5,000 for company use. "Philanthropy from a corporate?" I asked him. "You can say that, Swati," said Chandru. "To be honest, though, these are very much under-priced. The same quality cards come from an established player in the field for thrice the price!"

I visited a handicraft unit run by women. They had been trained after the natural calamity, so that they could regain their lost livelihood. It was thrilling when one of them recognised me and said, "You had come with Geeta!" With the finance-man Chandru's sanction, I too bought items for about Rs 5,000 and handed a cheque.

I was moved when the coordinator thrust a dozen more articles and said, "Take these too! How can we forget the time you spent with us?" I protested when she was not willing to accept payment for the extra items. I said, "Whatever profit you make on what all I bought is meagre, compared to the prices we pay in the city. It looks like you are doing social service!" She said something philosophical, which I couldn't forget: "Our needs are simple too."

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Tax reforms

BACK in the office, the first thing to attend to was this mail from the boss. "Swati, start working on the pre-Budget memorandum that we have to submit to the Finance Minister.

Please contact the members of the industry association for their views, so that we can compile a list of suggestions within a fortnight."

Wearily I thought, "What a boring exercise! Nothing happens even if we present a long wish-list!" Do pre-Budget memoranda serve any purpose, I wondered? Send in your thoughts by Friday.

Swati_CA@hotmail.com

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