How To Get Higher Interest On Your Savings Account?

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With each passing day, despite promises to the contrary by government officials, any respite from high inflation appears a remote possibility. No wonder, the only way to survive is to tighten the purse strings while constantly scanning any opportunity to save. The financial advisory space, too, is abuzz with recommendations to make investments that will beat inflation. However, amidst the plethora of glitzy and complex investment products, the simpler options are often given a miss. Though there is no reason to ignore the advice from experts, it would also be worthwhile to look at the more humble, uncomplicated alternatives before setting your sights on the latest 'sophisticated' or 'customised' products.

To start with, you could delve into your safe or cupboard and take out the account-opening kit or any privileges/benefits manual from your bank, or simply, visit the bank's website. Several banks offer a feature that is often termed the sweep-in , sweep-out facilities to their accountholders . These are touted by banks as hybrid schemes combining the best features of a savings account and a fixed deposit. Essentially, these are projected as facilities that can make your idle cash work for you by fetching returns over and above the savings bank rate of 3.5% per annum. However, the features are not always uniform across the banks, which means that you need to take a close look at the fine print before signing up for this facility. Here's what you need to know about sweep-in , sweep-out facilities to get the best out of them:

MANAGING LIQUIDITY

Typically, the amount not required by an individual in the foreseeable future is transferred to a fixed deposit or directed towards other investments. They generally keep a higher amount in their savings bank account than what may be required, as the tendency is to err on the safer side. After all, nobody likes the idea of breaking a fixed deposit. At the same time, this concern over the possible penalty keeps them away from the returns they would have surely earned had the amount been directed to a fixed deposit instead. This is where the sweep-in-sweep-out kind of facilities come in — banks promote this facility as a one-point solution for this dilemma . They ensure both liquidity and the scope to earn the rate of interest available to the bank's regular fixed-deposit holders. Banks have been regularly making attempts to popularise this facility amongst their customers , resulting in some success . "Sweep-out contributes to around 10% to the total FDs booked in a month and Super Saver contributes to around 1% to the total FD base," says Surinder Chawla, head, retail liabilities products, HDFC Bank, which offers two such facilities. Adds Puneet Kapoor, executive vice-president , Kotak Mahindra Bank, "Around 44% of our total retail term deposit book is in Activmoney and 30% of our total active retail customer base has opted for this feature."

SWEEP-OUT …

Generally, when you decide to opt for the facility, a fixed deposit is linked to your savings account. You have to determine a threshold for the balance to be maintained in your savings account at all times. Any amount exceeding this limit then gets automatically 'swept out' to this fixed deposit. However, depending on the bank and even the account type, there could be variations in the structure . "For instance, the bank could allow the customer to determine this limit as long as it is above a certain amount versus the limit being pre-fixed by the bank," says Harsh Roongta, CEO, Apnapaisa .com. "Also, thefixed deposits could be in bundles of say Rs 1,000 rather than a lump-sum deposit of the amount." This apart, some facilities of this sort could allow the accountholder to determine the duration of the fixed deposit as against the tenure being decided by the bank. Take, for instance, SBI's Savings Plus Account, where the accountholder can choose the tenure of the deposit from one year to five years. In contrast, Kotak Mahindra Bank's Activmoney facility works differently . Here, the balance above a threshold in the current/savings account is transferred to a term deposit with a 181-day-tenure . In case of insufficient funds in the current/savings account, funds in the term deposit are swept into the former. The sweep in/out has to be in units of Rs 10,000.

…AND SWEEP-IN

The sweep-in feature, on the other hand, gets activated when you need to withdraw money or issue a cheque where the amount exceeds or breaches the threshold limit. To make good the shortfall in the savings account balance, the linked fixed deposit is broken and the required amount is 'swept into' your savings account. "In case of sweep-in , the amount swept-in will be paid interest which is lower of the original contracted rate and the rate applicable for the amount of time the deposit was with the bank. The remaining amount of the FD will keep earning the contracted rate of interest at which the deposit is booked," says HDFC Bank's Chawla. The FD is broken only to the extent of the amount required – and usually on a last-in , first-out (LIFO) basis — which means that you do not lose out on the interest on the entire FD amount. The LIFO method of transferring funds back into your savings account on demand ensures minimal interest loss, as the amount swept in last is withdrawn first. "If the deposit is prematurely withdrawn (in full or part), the with-drawn amount gets interest on the applicable rate for the tenure the money remained with the bank instead of the original contracted rate. We do not levy any penalty as of now," says Kapoor of Kotak Mahindra Bank. However, some banks have started charging a premature withdrawal penalty, so study the terms and conditions carefully before opting for, and actually using, this facility. Often, financial planners stress on the importance of building a contingency fund to take care of your needs to deal with a financial emergency like a job loss or an unexpected major expenditure . According to them, an amount capable of taking care of at least six months' expenses should be kept aside in a liquid instrument . You would do well to consider this facility if you are looking for an avenue to park such a corpus.

Put Your Savings on Autopilot

The sweep-out facility moves specified excess cash from your savings account to your fixed deposit. The money can be swept in whenever there is a shortfall in the savings account

HOW TO USE THE SWEEP FACILITY

Sweep-in , sweep-out facilities are billed as tools to make your idle cash work for you Under this facility, you can link your savings account to a fixed deposit offered by the bank The facility will ensure that any excess amount over the pre-set threshold limit gets transferred to the fixed deposit If you need to withdraw beyond the threshold limit, the amount required gets 'swept-in' to your savings account The arrangement eliminates the need to break the entire FD. You lose interest only on the amount actually used It also does away with the need to retain a huge amount in your savings bank account to ensure liquidity, thus prevents losing out on possible interest earnings

Source: Economic Times

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It appears that the current physical asset of choice, unlike in the past two years, is real estate and not gold-Morgan Stanley

The emerging slowdown

BY: bY

BY::Ila Patnaik : Fri Aug 31 2012, 02:15 hrs

Emerging economies survived the global shock in 2008 quite well. But now that the industrial countries have not fully recovered, the crisis in Europe continues, the uncertainty in world markets remains high and large emerging economies are seeing a rapid fall in GDP growth. Weak growth in emerging markets will, in turn, slow down the world economy. In the last decade, growth in the US and China contributed to a benign global environment, which made it possible for India to get away with more policy mistakes. Now, the government needs a bigger focus on building confidence in private investment.
The slowdown of GDP growth in emerging economies appears to be well entrenched now. In 2010, there seemed to have been a rebound in emerging economies, but it has not been sustained. The GDP growth in Brazil declined from 6.1 per cent in 2007 to 2.7 per cent in 2011. China has seen a dramatic fall in GDP growth from 14.2 per cent in 2007 to 9.1 percent in 2011. In 2012, emerging economies are expected to slow down further.
China was a big contributor to post-crisis world GDP growth. China’s GDP growth will be roughly 7.5 per cent in 2012. Two factors are at work. There are deeper problems in China’s growth model that are beginning to rein in growth. In recognition of these deeper problems, the government pushed towards policies that would yield sustainable growth. These policies inevitably entailed slower growth. Recent indicators suggest that the Chinese economy is slowing down to a greater extent than expected. With consumer prices falling in the last three months, indicating a possible deflation, the Chinese central bank announced two interest rate cuts. China also has significant scope for a fiscal stimulus at the central and local levels.
What was wrong with the old Chinese model of growth? In the pre-crisis years, Chinese families saved half their incomes, and American families consumed more than they earned. Low Chinese consumption was engineered through the exchange rate, monetary policy, financial repression, etc. The delicate balance between China and the US broke down in the crisis. Policymakers everywhere have talked about the need for a rebalanced world in which Chinese households save less and American families consume less. A rebalancing should lead to a lower current account surplus for China, reducing its build-up of reserves; less buying of US treasury bills by China; and lower liquidity and asset price bubbles in the US economy.
A good part of this required adjustment has come about. China’s current account surplus has fallen from a high of 10 per cent in 2007 to 2.8 per cent in 2011. While this is good for the world, these changes require substantial changes within China. Growing inventories, a fall in export orders and declining capacity utilisation all suggest that the slowdown in China is intensifying.
The Chinese slowdown is cause for concern worldwide. By itself, this yields slower world GDP growth. Many emerging economies are part of the supply chain that feeds Chinese manufacturing, and have benefited from Chinese demand. A slowdown in China will lead to a decline in their growth. In July 2012, Indian exports to China showed an 8 per cent decline on a year-on-year basis: a sharp contrast to the explosive growth of recent years. The bulk of this decline was in iron ore.
Another channel of impact for India is indirect: through the world prices of tradeables. The world price of things that can be globally traded — for instance, steel — is influenced by over-capacity in China. The Chinese slowdown is exerting a negative influence on the global prices of tradeables. This hampers the profitability, and thus the outlook for investment, of Indian firms that make tradeables. This channel of influence is likely to be more important for India, when compared with the small scale of Indian exports to China.
Chinese households consume about 30 per cent of Chinese GDP, compared to Indian households, which consume about 70 per cent. The value of 30 per cent is the lowest consumption share in the world. If the Chinese economy slows down, there are two possibilities. One is that households continue to earn and spend the same share in GDP. This could lead to social unrest, and further disrupt growth.
Most observers believe that this scenario will not arise. The key is to increase the share of consumption, so that even if GDP growth slows, consumption growth stays strong. This is closely linked to the problems of the Chinese model of growth, which emphasised a very high investment rate. The question before China today is finding a new policy framework involving a lower share of resources going into investment, an increasing share of consumption in GDP, ending the emphasis on export of goods and capital, and settling into a lower but sustainable growth trajectory.
The Chinese leadership appears to have understood that their old growth model was flawed. They appear to be keen on moving towards a new growth model. In other words, it is not likely that the emerging GDP slowdown will bring forth a fresh wave of highway projects to prop up the economy. The recent stimulus measures were small and intended to slow down the speed of reduction of growth rate. The debate within China is about how to shift the growth model. We in India need to factor this into our thinking about our growth model.
From 2004 onwards, the Indian leadership has neglected the foundations of economic growth. The economic policy reforms of previous years, coupled with benign global conditions, gave effortless growth, and the focus of the UPA was on spending. Now we need to re-evaluate our growth model, and ask how to rebuild the confidence of private investors so as to obtain growth even when global conditions are adverse.
The writer is a professor at the National Institute of Public Finance and Policy, Delhi, express@expressindia.com

Suman Bery: Supplying demand

Careful analysis suggests the supply side of the economy is still capable of sustaining nine per cent growth

Suman Bery / Aug 31, 2012, 00:11 IST

Faithful readers of this column will recall my decision earlier this year to shift focus from issues in the domestic economy to India’s place in the world. I am deviating from that principle this month. I was recently asked to make a presentation on India at an international conference, and this prompted me to look carefully at the Indian numbers once again. The key question of interest to the audience was why Indian growth had slowed, and when it might revive.
To non-specialists this may seem a simple, indeed trivial question to answer; but in reality, much of the answer is based on conjecture. What the statisticians are able to provide us with, through the national accounts, is at best an account of what did happen. It is left up to theory, modelling and judgement to explain why the economy behaved in the way it did. A brief review of national accounts concepts is perhaps helpful to illuminate the discussion that is to follow.
The national accounts are prepared from several perspectives, which are then used to cross-check each other. It is, therefore, rightly called the “system of national accounts” (SNA). Within the SNA the “product accounts” refer to flows of goods and services in the economy and are presented both from the supply side (usually called “industrial origin”) and from the demand side.
The broad categories on the supply side are the familiar ones of agriculture, industry (including both manufacturing and construction) and services. Final demand is represented by consumption, gross capital formation and by “net exports”, the difference between exports (of both goods and services) and imports. There is a third set of balances, which track the financial flows associated with these transactions. These financial accounts generate the well-known result that domestic capital formation (fixed investment, change in stocks and acquisition of valuables, such as gold) not financed by domestic saving generates a current account deficit in the balance of payments, which in turn is financed by foreign saving.
In both advanced countries and emerging markets, long-term growth is determined by developments on the supply side (capital, labour and productivity). These determine the path of what is called “potential output”. However, there can be significant deviations from this long-term path. It is only with hindsight – and the application of some fairly muscular statistical analysis – that one can definitively separate cycle from the underlying trend. In the industrial countries, these fluctuations are usually associated with developments in aggregate demand. As the present financial crisis, the travails of Japan and the Great Depression of the 1930s all demonstrate, disruptions in aggregate demand can last for sustained periods of time, and such episodes are most often associated with failures in the banking and credit system.
By contrast, in emerging markets, short-term fluctuations around the long-term trend are more conventionally associated with supply bottlenecks: food, fuel, raw materials and foreign exchange. Fiscal, monetary and exchange rate policy do have a role to play in demand management, but the transmission channels are more opaque and less well-developed and less well-understood than in the mature countries. This makes macroeconomic analysis in emerging markets a more challenging task than in advanced countries.
Turning finally to numbers, a most valuable recent source is the Economic Outlook* put out earlier this month by the Prime Minister’s Economic Advisory Council (PMEAC), chaired by Dr C Rangarajan, a body with which I was privileged to be associated until last year. The PMEAC’s semi-annual published reports provide an extremely useful blend of analysis, interpretation and forecast in a compact format. In addition, the relatively few tables in the report are very well designed. They present key ratios in a long enough series to reveal the underlying structural changes in the economy while also helping illuminate the shorter-term fluctuations.
Table 1 in the Economic Outlook provides the reader with essential data by industrial origin, while its Table 3 provides essential analysis of the demand components in the economy. The overall growth story is reasonably familiar: three golden years from FY06 (2005-06) till FY08 with growth in excess of nine per cent; the slowdown to 6.7 per cent in FY09; two slower but respectable years in FY10 and FY11 with growth around 8.5 per cent; and then the unexpected slump to a projected 6.5 per cent in the fiscal year just ended. It is more interesting, therefore, to focus on non-agricultural growth, where, as the Economic Outlook rightly points out, the main slide has been in manufacturing and in construction. Manufacturing growth in particular has dwindled from 9.7 per cent in FY10 to an estimated 2.5 per cent in FY12.
It seems unlikely that this deterioration in manufacturing primarily reflects supply constraints (although land, power, skilled labour and infrastructure continue to bedevil the sector), so it is worth glancing at the demand data presented in Table 3. Much of the attention, in the Economic Outlook and elsewhere in the press, is on trends in gross domestic fixed capital formation (structures and machinery). The rise in this ratio, from around 23 per cent of GDP in FY01 to 33 per cent in FY08 was one of the most heartening aspects of the boom. Amazingly, for much of this period the domestic savings rate kept pace, rising to a towering 37 per cent in the banner year of FY08.
Fast growth seems, therefore, to have been good for both saving and capital formation, in part by strengthening the public finances. Even inflation was on a downward path till FY08. Based on the conventional indicators, this was not an unsustainable boom. Indeed, the usual signs of overheating (rising inflation, widening current account deficit) have become manifest as the economy has slowed. This is even clearer in the product accounts: in a recent report Citi shows that net exports have widened from -3.2 per cent in FY06 to an estimated -7.4 per cent in FY12, representing a massive withdrawal of net demand, even though exports have been strong.
I hesitate to draw firm policy conclusions from these numbers, except to note that FY09 subjected the economy to the triple shock of a drought, the slowing of global demand and the political transition to UPA-II at home. These shocks have exacted a continuing toll on the fiscal accounts, inflation and the investment climate. My main takeaway is that the supply side of the Indian economy remains capable of sustaining nine per cent growth, and that worries about overheating should not prevent us from trying as the global environment improves.

---

The writer is Chief Economist, Shell International.
These views are personal.
*http://eac.gov.in/reports/eco_report1708.pdf

There's both good news as well as bad news for those worrying about the India growth story. Here's the good news first. Consumption, the bulwark of India's economic growth is alive and kicking. And leading the charge is not urban India but the rural hinterlands of the country. As per a leading daily, additional spending in rural India was nearly Rs 800 bn more than urban India between FY10 and FY12. And this spending wasn't just restricted to necessities. There was a shift beyond it to discretionary products like TV and mobile phones. What more, this trend is only likely to get stronger from here on. Little wonder, consumer companies are making a beeline for rural areas.

Driving into future: Ashok Leyland

To push the envelope in products and technology

T E Narasimhan / Chennai August 30, 2012, 0:55 IST Business standard

From all accounts, Ashok Leyland (AL), one of India’s leading bus makers, is in cruise control. It has an oversized share of the market at 41.78 per cent, and, along with Tata, which has 41.94 per cent, rules the universe of buses in India.
Moreover, Ashok Leyland has a considerable advantage over the smaller players — especially from abroad, like Volvo or Isuzu — with its strong distribution network of 420 nationwide dealers, enviable brand identity, good relations with state transport corporations as well as local sourcing partners.

Yet, AL has decided it needs to push the envelope in products and technology. It has done so by buying a 75 per cent stake in British bus manufacturer Optare, in December 2011, with the intention of bringing its flagship bus, Solo, described as a low-floor midibus, to the Indian market. The bus will hit Indian roads in the next few months.
This could turn out to be a savvy move. Sometimes, proactive policies while in a position of strength can do wonders to check problem spots that often germinate into full-fledged disasters. And, it is not as if Ashok Leyland hasn’t had its share of problems. For instance, amidst the 2008 recession, the company’s bus sales took a dip from FY07 to FY09 in arguably one of the fastest growing markets for buses in the world. Recently, it was unable to win important bids for contracts with two state transport corporations.
The bus market in India — which saw 98,673 units (including big buses and small ones) sold in 2011-12 versus 92,754 in the previous year — is undergoing a significant transformation. Earlier, travellers in India primarily considered cost as the fundamental determining factor in the decision-making process of which bus to board. Now, comfort, along with safety and reliability is a priority, says Abdul Majeed, analyst with PwC India, which explains Volvo’s rise to prominence in the luxury end of the spectrum. The key driver for all of these is technology, something that industry observers say both AL and as its competitor Tata are not up to speed with, at least vis-a-vis their global competitors.
The main advantage Optare will give AL is in the intra-city space, say industry observers. This is an important category to cater to. No longer like the rickety buses of yesteryear, buses today are fancier and are more comfortable, and commuters are increasingly getting used to them. Tata, for instance, has tied up with Brazil’s Marco Polo and South Korea’s Daewoo, and its sleek buses are now ubiquitous on Delhi roads. AL, too, does not want to be left behind. “We recognise the need to maintain cost competitiveness for the end-customer and consequently our focus would be to see how we can hold on to the prices and offer a match in the market for a value proposition. I do believe that we would not be left behind in terms of the product offerings which are more relevant for the domestic market. From all these fronts we should be able to give a fight,” says K Sridharan, CFO of AL.
Optare’s Solo will provide a product that would compete in this area — traditionally categorised as lying between the normal and luxury segments. “If Solo fits in this space, then AL has got big scope, since STUs (state transport undertakings) want to upgrade from the normal to the next level and AL has all the advantages including brand, long-term relationship and cost,” said the analyst.
AL is also planning to introduce the JanBus, a single-step, front-engine, fully-flat floor bus for which the company has 16 patents. The bus has an automated manual transmission and is targeted at STUs. Meanwhile, AL’s foreign subsidiaries are already offering products for the luxury segment, including buses built in Vietnam, Turkey, Egypt and Peru on 8XX Chassis,in Singapore on AVIA chassis and in Ukraine on the Falcon Chassis. AL is also looking at bringing Hybrid versions of Optare’s electric buses. Since the electric buses may be too costly for Indian markets, the company is evaluating hybrid options

ITC is in long term uptrend since 2005. One can always enter at current price as there is strong earning visibility. I have been buying ITC for past 12 years and have no regreat.

This is no ordinary slowdown

R. SRINIVASAN

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For the first time in a decade, the electrical equipment industry registered negative growth in the first quarter of this fiscal. — C. Venkatachalapathy

A combination of virtual inaction on the policy front and a very real slowdown in growth both in India and abroad have inflicted unprecedented damage on business sentiment.

August 29, 2012:  

Normally, I avoid the use of the first person in this column. However, this time, I would request the reader’s indulgence to allow me to intrude into the column, since the example I would like to use is difficult to convey in the third person.

Last week, I caught up with an old friend of mine, one of India’s thousands of bright, talented managers who are powering the India Growth Story. He is currently the CEO of a medium scale developer. Usually cheerful and optimistic, this time around, he was unusually gloomy. “Another bad quarter or two and I think I will be out of a job,” he told me. “And this time, there are no jobs out there.”

That last statement was a bigger surprise, since I was under the impression that my friend was one of the fortunate band of Indians who would never have to worry about landing a lucrative position, leave alone just another job. After all, he was an IIT engineer, a management graduate from a leading business school, and someone who had rotated rapidly and successfully through several of India’s growth sectors — consumer products, telecom, real estate, and so on — and had followed the standard career path of the IIT/MBA cohort through middle and senior management to the corner office and the CEO tag by the time he hit his forties.

Policy paralysis

His was the kind of talent India Inc has been saying it is short of. I was under the impression that while the slowdown may be showing in the big picture numbers, it has little relevance at the individual, personal level to people like my friend, one of India’s best and brightest. But somewhere along the road from UPA-I to UPA-II, it appears, his personal career graph, and economy’s growth curve, have coalesced — on the way down.

The slowdown is no longer a slowdown for many, it transpired on further talk. It had become a very real, very punishing recession. The trouble is, amidst the clamorous din raised by scams and scandals, his voice, like the voice of tens of thousands of others like him, struggling to keep their businesses going — and growing — amidst increasingly difficult conditions, has been lost. Amidst the apparent obsession of politics and bureaucracy with ‘coal gates’ and ‘airport gates’, worries like the declining fortunes of iron foundries or underwear manufacturers is not getting any political or policy making bandwidth. Not that others with much bigger metaphorical lungs haven’t tried.

Housing lender Housing Development Finance Corporation’s (HDFC) widely respected chairman Deepak Parekh became the latest voice to join the growing chorus against the government’s ‘policy paralysis’. “You cannot continue to govern like this. All the deficit numbers, financial numbers will go crazy. You will be downgraded for sure,” he said in a television interview.

He is not alone. Everyone from CII President and Godrej Group Chairman Adi Godrej to Infosys founder N. R. Narayana Murthy to Wipro chief Azim Premji — all people who are currently managing to run globally competitive enterprises in India — have said virtually the same thing.

‘Self-inflicted’ challenges

Speaking to analysts after announcing Wipro’s results, Premji said, “We are working without a leader as a country. If we do not change, we would be down for years.” Infy’s Murthy, in an interview to investment banking firm Morgan Stanley, said India’s current challenges were “self-inflicted.”

Self-inflicted or externally perpetrated, the combination of virtual inaction on the policy front, and a very real slowdown in growth both in India and abroad, have inflicted serious damage on the economy. Forget the big picture numbers — the ever decreasing GDP growth forecasts, or the continued downturn in the Index of Industrial Production numbers — a drive around any industrial estate is enough to confirm this. The slowdown is still a slowdown for some, but for a vast majority of India’s real manufacturing backbone — the Micro, Small and Medium Enterprise (MSME) sector — it has long since turned into a very real, and very harsh recession.

Power deficit

Take a look at what, until recently, was a very thriving part of the MSME sector. Although there are a few big ticket players in the electrical and electronics manufacturing sector, the bulk of the participants fall in the MSME sector. Everything from the nameless pieces of electrical wiring to the switches and fuses of unknown provenance which your electrician pulls out of his toolbox, to electrical transformer and switching equipment in your colony, have been probably manufactured by one of the tens of thousands of small to medium scale manufacturers who populate this sector.

Now, for the first time in a decade, the electrical and electronics manufacturing sector has shown negative growth in India. According to numbers released by the Indian Electrical and Electronics Manufacturers Association (IEEMA), the apex Indian industry association of manufacturers of electrical, industrial electronics and allied equipment, for the first time since 2002, the Indian electrical equipment industry has seen a negative growth of 2.4 per cent in the first quarter (Q1) of the current fiscal (2012-13), compared to the corresponding period of Q1 FY12 (a growth of 13.82 per cent) and sequential quarter Q4 FY12 (a growth of 14.10 per cent).

Commenting on the Q1 FY13 results, IEEMA President Ramesh Chandak said, “Ironically in Q1 of FY13, there was over-achievement of the country’s power generation and transmission and sub-stations capacity addition targets. So, under ideal conditions, domestic manufacturers of power equipment should have correspondingly gained business, but reality is otherwise.”

That is because, during the same period, imports have more than doubled. So, while the Government appears to have finally woken up to the fact that unless India’s growing power deficit problem is addressed, whatever growth advantages the country has secured so far is likely to be lost and in spending money to try and salvage the situation, the benefits of this are going elsewhere.

India’s loss, China’s gain

In the case of the electricals and electronics manufacturing sector, it appears India’s loss has been China’s gain. China now accounts for 44 per cent of India’s electricals imports, says IEEMA. And imports from China in the power sector alone are growing by 59 per cent a year.

This is not news to anybody, of course, least of all, the government. After all, it did set up the National Manufacturing Competitiveness Council way back in September of 2004, to address precisely this issue. The Council has even come up with a national strategy for manufacturing competitiveness, and several other reports and whitepapers.

Clearly, those who are supposed to have looked into these suggestions, and acted upon them, have been occupied with other things. Which is why IEEMA members, and members of dozens of other industry associations like it, are facing a gloomy future. And why my CEO friend is gearing up to spend some ‘quality time’ with his family soon. 

Gift Deed and Stamp Duty

I  bought a property in the name of my sister-in-law (single name). The entire payment of the loan and other related payments have been made by me. She stays abroad. Now I want to transfer the property in my name by way of gift. What is the procedure? Can she give a power of attorney (PoA) to my brother who can come and transfer the same? Is it legally correct to transfer the gift agreement through my brother?
—Seshadri S
Section 123 of the Transfer of Property Act, 1882 reads as follows: “For the purpose of making a gift of immoveable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses. For the purpose of making a gift of moveable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery. Such delivery may be made in the same way as goods sold may be delivered.”

Your sister-in-law may either execute a gift deed, gifting the said property to you or execute a special or specific PoA in favour of your brother or any other person, specifically granting the power to your brother or such other person to gift the property to you and to execute the applicable documents and admit and lodge the same for registration to give effect to the gift of the property in question. It may be noted here that a general PoA will not be sufficient and the attorney will not have the requisite power to execute a valid gift deed of such property.
In one particular matter, it was held by the Punjab and Haryana High Court that in case a gift deed is executed, not by the donor himself but by a third person as his attorney, the power to gift the property must emanate from the donor. It must be noted that one of the reasons given by the court for deciding that the gift deed in question in that particular case was not valid was because the PoA did not specify the name of the person to whom the property was intended to be gifted to by the owner. Thus, it would be advisable that your sister-in-law specifies her intention to gift the said property to you by specifically mentioning your name in the PoA that she will execute in favour of your brother.
However, a PoA that grants to the attorney the power to gift immovable property to a particular person must be registered. In certain states in India, the presence of the maker of the PoA may be required at the office of the registrar or sub-registrar as the case may be.
It may be noted that stamp duty will be payable on the gift deed. In certain states, the stamp duty is payable on a gift deed when the gift is being made to a family member (husband, wife, brother or sister) or any lineal ascendant/descendant of the donor (person making the gift) is less than that payable on a gift deed when the gift is made to a person other than those named above. So this benefit won’t be available in your case as the donor is your sister-in-law (not a direct family member).
Shabnum Kajiji is a partner with Wadia Ghandy & Co. Advocates, Solicitors and Notaries.

exports of auto parts slowing due to a weak global economy.

While several TVS Group companies— Sundram Fasteners, Sundaram Brake Linings, Wheels India, Brakes India Ltd, Axle India Ltd, TVS Srichakra, Sundaram Finance—are listed, the public float of these companies is small, an indication that the family is not comfortable with a large public shareholding (and the threat of a possible loss of control).
Umesh Karne, an auto analyst with Brics Securities Ltd, says many of these companies have managed to create shareholder value while they haven’t displayed any aggression in the market. Still, their appeal among investors has dimmed, with exports of auto parts slowing due to a weak global economy.

Home  »  Income Tax  »  E FILING of Income Tax Return – Do’s, Don’t’s & Common Errors

E FILING of Income Tax Return – Do’s, Don’t’s & Common Errors

• Friday, August 3, 2012, 9:00
• Income Tax
• Articles, Featured

Impact of Errors made while filing returns
•          Returns can be classified as defective u/s 139 (9) and in some scenarios the return can be declared in valid / Non Est.  ITD is not introducing this concept to cover certain types of errors in order to prevent future grievances
•          Computation Errors – In electronic filing it has been noticed that most of the errors are due to data errors as filed by the assessee This includes non filling of key schedules, wrong details etc resulting in rectification requests etc which delay closure of processing
•          Inability to pay refunds to the assessee
Key rules to be followed to ensure trouble free processing
1. Once E filing is done (without digital signature), ITR V needs to be sent in time to CPC. In case ITR V acknowledgement is not received within reasonable time, the assessee may call up the CPC call centre to verify status Nearly 10% of assessees have failed to send the ITR V to CPC after E filing
2. Assessee needs to fill his email address, mobile no correctly to ensure appropriate communication from the Income Tax Department. The use of the Tax practioner/CA’s email address may not be appropriate
3. The assessee should make sure the correct (latest) address, bank account, MICR no. is filled
4. The assessee should verify tax credits available in Form 26AS/NSDL websites. Mismatches are the single largest cause of incorrect tax computation. Non credits may be taken up with the TDS deductor and/or the banker as soon as they are noticed.

ITR 1 – the Sahaj form

Personal Information Schedule

Name: Has to match the PAN database

Date of Birth: Mistakes here will result in computation of higher taxes in case of senior citizens

Address: House/Flat no, City, PIN Code, are mandatory fields. Non filling will result in refund delays

E mail address: Needs to be filled correctly, is the basis of all communication from CPC. Mistake will result in non receipt of all intimations from CPC. Use of Auditor/Tax practitioner’s ID may be avoided

Mobile No:Full Mobile No without use of +91 needs to be enterered. This is essential for all SMS based communication

Sex: Should match the PAN database. If PAN database is wrong, it results in mistakes in computation

Status : Should be correctly filled

Residential Status – the status of NOR and NRI should be mentioned only where applicable as they are not eligible for certain benefits available to resident assessee

Part B – TI
1. Salary amount entered in BTI should be same as in TDS Salary and final value in Schedule salary.
2. CYLA or BFLA loss has to be mentioned in the appropriate rows, else loss will not be allowed.
3. In STCG – many users confuse between STCG under section 111A and STCG others and enter against one another leading doubling to income from Capital Gains.
4. In case of HP loss, BTI value for Income HP should be 0 or null and final value in schedule HP should be a loss
5. It is not enough if just part B TI is filled. Respective schedules also need to be filled for Eg Schedule HP, Sch Depreciation etc. Else the return can be treated as a defective return u/s 139 (9).

Part B TI – TTI
1. Relief under 89,90,91 is to be entered ONLY if applicable.
2. The value entered in schedule TDS, IT and TCS has to be entered in Part B TTI also. Eg. Schedule IT is entered but in no amount is mentioned in this section as Advance Tax or SAT.
3. The Bank account no. has to given correctly and entered even if no refund is due. This is to ensure that refund arising from recomputation of income by the ITD can be paid to the assessee. The A/c no and the name in the bank account has to tally.
4. The MICR No. should be in 9 DIGITS and first 3 digits of MICR code denotes the place of residence as mentioned in address’s PIN Code.
5. Eg. 560056025- ‘560’ refers to Bangalore whose PIN starts with 560 000. The assessees may avoid giving bank accounts where MICR starts with ‘0’.
Income Schedules – Salary, HP
1. Net Salary should be entered and not Gross Salary. This will result in higher taxes
2. The Salary value should tally with that entered in Schedule TDS
3. In Schedule HP, the loss from house property has to be entered with all mandatory details of the property including details as to whether it is let out. Entering only the loss as summary makes it incomplete
4. Co-owners of property should enter only the income pertaining to their share in the property. Entering the gross rental receipt and thereafter offering this share of income from such rental will increase total income
Capital Gains
1. Deemed Capital Gains arising out of Schedule deprecation should be considered by the assessee in schedule CG.
2. Non filing of full value of consideration or filling only expenditure under various sub categories of CG leads to incorrect computation of income.
3. Filling of only cost of acquisition also leads to incorrect computation.
4. The quarterly breakup of capital gains in the CG schedule should be post set off of all losses.
5. Filling of accurate quarterly breakup is necessary for computation of interest under 234C.
6. Correct section codes should be used depending upon the type of capital gains income in the SI schedule.
7. Exempt LTCG should not be entered in CG schedule as well as in BTI, it has to be mentioned in Schedule EI
Schedule BP
1. PBT should NOT BE included Deprecation value
2. Income from speculative business included in PBT should be shown separately in Sl. 2 and Sl. 38 of schedule BP.
3. Income offered under other heads other than BP included in P&L should be reduced in Sl. 3 of Schedule BP.
4. All disallowances in Part A OI should be considered in Schedule BP.
5. Income offered under section 44AF(Deemed Income) if included in PBT should be reduced in Sl. 4 of Schedule BP.
6. Deprecation as entered In P&L should be shown in Sl.11 of Schedule BP alone and not in Sl 22 or 7 or another rows in BP. The schedule DPM, DOA should be mandatorily filled.
7. Assessee claiming benefit of rule 7A 7B 7C should mention appropriate code in nature of business schedule.
8. PBT in P&L and PBT shown in sl. No.1 of Schedule BP should be same.
9. Specific schedule for ESR, 10A etc should also be filled when a claim is made in schedule B
SCHEDULES DPM,DOA, DCG AND DEP
1. All the relevant values to arrive at the deprecation mentioned in Schedule BP is to be filled in Schedule DPM, DOA.
2. DCG arising out of deprecation schedules should be accounted for in CG and taxes paid.
3. The value of depreciation as per Schedule DEP and value mentioned in Schedule BP should be the same.
Chapter VI A, MATC
1. In case of deductions where separate schedules is also required to be filled, the same should be FILLED WITHOUT FAIL- Eg. 80G,80IA, 80IB, etc. Deductions will not be allowed If specific schedules are not filled,
2. Entering of only total deductions alone in Schedule VIA total will not be result in wrong computation of deductions. Section wise (amount claimed for 80C, 80IA, 80G etc) should be broken up and mentioned in as per the schedule
3. To compute and avail MAT credit in MATC, sl. No. 1 to 6 should be filled with relevant details and the final value should be claimed in sl. No. 7 (Lower value of that in Sl.No. 3 or Sl. NO 6) should be specifically filled.
Schedules CYLA, CFL, BFLA ,

SCHEDULE  CYLA

1. Loss sought to be adjusted should be claimed against a specific income and also under the loss to be adjusted heading.

2. If lottery income is offered as part of OS income, the value to the extent of lottery income should be excluded while claiming income from OS in CYLA.

3. The respective schedules should also contain loss details for CYLA.

SCHEDULE  CFL

1. Date of filing of return for relevant year in CFL should be filled.

2. Loss details should be entered under respective income sources.

SCHEDULE  BFLA

Specific differentiation in allocating the losses under BFLA should be made and the claim of adjustment should be made based of the relevant heads

Schedule SI (Special Income) & Schedule EI (Exempt Income)
1. The assessee has to verify the nature of special income and enter appropriate Section Code. Entering wrong section code can lead to consideration of the incorrectly offered income for taxation
2. The assessee needs to bifurcate incomes taxable at special rate and normal rate and if there is no provision in respective schedules like CG or OS, he/she has to offer income chargeable at special rate- they need to be disclosed on in Schedule SI.
3. The income exempt from tax shown in P&L or BP or BTI should also be filled in EI and they should tally
Schedule TDS and TCS
1. TDS on salary should be claimed ONLY in schedule TDS Salary (ITR1) or TDS1 (ITR 2-4).
2. TDS on Interest should be claimed ONLY in TDS on interest(ITR 1) or TDS2(2-4).
3. Claiming of TCS claims in TDS schedules and vice versa will lead to mismatch translating into excess demand or lower refund
4. The claim of TDS amount should be made in TDS deducted as well as TDS Claimed for the year columns in schedule TDS2 and TCS.
5. TDS claims should tally with Form 26AS or NSDL database which are accessible very easily.
Schedule IT
1. Dates of deposits should be entered in DD/MM/YYYY format and not in any other format like MM/DD/YYYY format. This will lead to mismatches
2. Exact amount paid in the challan should be claimed in return- rounding off to nearest 10 or 100 leads to mismatch.
3. Individual payments should be separately claimed. Clubbing of multiple challans or entering consolidated payment will lead to mismatch.
Common Errors noticed in E filed rectification requests
1. After filing rectification application with change in bank details- assessee is not sending the Response sheet along with cancelled cheque within stipulated time.
2. For change of bank details for refund failure, there is no need to file rectification application. Only response sheet will suffice.
3. Many assessee file xml for rectification without ANY correction leading to non rectification of the case
4. Assessee having paid demand are filing for rectification to get a nil demand rectification order. This is NOT NECESARY.
5. Rectification applications where TOTAL INCOME is changed will be rejected. In case of change in TOTAL INCOME a revised return NEEDS TO be filed.
6. Rectification requests will be auto-rejected when an earlier rectification request is under process. In such case no specific reason is given except stating that an earlier rejection request is already under consideration.

Credit Suisse has an 'outperform' rating on ITC Ltd, Godrej Consumer Products Ltd, Emami Ltd, GlaxoSmithKline Consumer Healthcare Ltd, Marico Ltd and Hindustan Unilever Ltd, while it has a ‘neutral’ rating on Nestle India Ltd and ‘underperform’ on Dabur India Ltd and Colgate-Palmolive (India) Ltd.

Made in Bangladesh

Export Powerhouse Feels Pangs of Labor Strife

Justin Mott for The New York Times

Workers at a garment factory in Dhaka, the capital of Bangladesh, which produces shirts and sweaters for global export. More Photos »

By JIM YARDLEY

• ISHWARDI, Bangladesh — The air thickened with tear gas as police and paramilitary officers jogged into the Ishwardi Export Processing Zone firing rubber bullets and swinging cane poles. Panicked factory workers tried to flee. A seamstress crumpled to the ground, knocked unconscious by a shot in the head.

Made in Bangladesh

This is the first of two articles examining the battle over labor rights in a leading garment-exporting country.

Multimedia

Slide Show

Labor Unrest in Bangladesh’s Garment Industry

Map

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Dozens of people were bloodied and hospitalized. The officers were cracking down on protests at two garment factories inside this industrial area in western Bangladesh. But they were also protecting two ingredients of a manufacturing formula that has quietly made Bangladesh a leading apparel exporter to the United States and Europe: cheap labor and foreign investment.

Both were at stake on that March morning. Workers earning as little as $50 a month, less than the cost of one of the knit sweaters they stitched for European stores, were furious over a cut in wages. Their anger was directed at the Hong Kong and Chinese bosses of the two factories, turning a labor dispute into something potentially much larger.

“If any foreigner got injured or killed, it would damage the country’s image around the globe,” said a police supervisor, Akbar Hossein, who participated in the crackdown. “We all know the importance of these factories and this industry for Bangladesh.”

Bangladesh, once poor and irrelevant to the global economy, is now an export powerhouse, second only to China in global apparel exports, as factories churn out clothing for brands like Tommy Hilfiger, Gap, Calvin Klein and H&M. Global retailers like Target and Walmart now operate sourcing offices in Dhaka, the capital. Garments are critical to Bangladesh’s economy, accounting for 80 percent of manufacturing exports and more than three million jobs.

But with “Made in Bangladesh” labels now commonplace in American stores, Bangladesh’s manufacturing formula depends on its having the lowest labor costs in the world, with the minimum wage for garment workers set at roughly $37 a month. During the past two years, as workers have seen their meager earnings eroded by double-digit inflation, protests and violent clashes with the police have become increasingly common.

In response, Bangladeshi leaders have deployed the security tools of the state to keep factories humming. A high-level government committee monitors the garment sector and includes ranking officers from the military, the police and intelligence agencies. A new special police force patrols many industrial areas. Domestic intelligence agencies keep an eye on some labor organizers. One organizer who had been closely watched, Aminul Islam, was found tortured and killed in April in a case that is unsolved.

“The garment industry is No. 1 for exports and dollars for the country,” said Alonzo Suson, who runs the Solidarity Center in Dhaka, an A.F.L.-C.I.O.-affiliated labor rights group. “Any slowdown of that development is a national security issue.”

For the Obama administration, which has cultivated Bangladesh as a regional ally in southern Asia, labor unrest has become a matter of growing concern. In a May visit to Dhaka, Secretary of State Hillary Rodham Clinton raised labor issues and the Islam murder case. In June, Ambassador Dan W. Mozena warned Bangladeshi garment factory owners that any perception of a rollback on labor rights could scare off multinational brands and damage the garment industry. “These developments could coalesce into a perfect storm that could threaten the Bangladesh brand in America,” he said.

For global brands, which are forever chasing the cheapest labor costs from country to country, Bangladesh has been a hot spot, especially as wages have risen in China. McKinsey, the consulting giant, has called Bangladesh the “next China” and predicted that Bangladeshi garment exports, now about $18 billion a year, could triple by 2020.

But in late July, representatives from 12 major brands and retailers, alarmed by the rising labor unrest, prodded the Bangladeshi government to address wage demands, a suggestion rejected by the labor minister. “No reason to be worried,” Khandker Mosharraf Hossain, the minister, told reporters, noting that brands were not canceling orders.

Bangladesh was born in bloodshed during a 1971 war of independence from Pakistan and has since gyrated between military rule and fragile democracy. It has about 150 million people and is one of the most densely populated countries in the world. Derided by Henry A. Kissinger as the world’s “basket case,” Bangladesh has since made considerable progress on fronts like women’s literacy, juvenile and maternal mortality, per capita income, and life expectancy.

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This upward arc is often credited to Bangladesh’s vibrant civil society, but the garment sector, in which about 80 percent of the workers are women, has also played a critical role, providing socially acceptable jobs to women in a conservative Muslim country. Prime Minister Sheikh Hasina, in lobbying the United States for favorable trade preferences, has argued that such policies would improve the lives of millions of poor women.

Bangladesh’s Home Ministry, in a written response to questions, said the government does not favor factory owners over workers but acts as a “referee/umpire” while maintaining an “investment friendly” environment for foreign and domestic investors.

Yet Ms. Hasina’s government has resisted expanding labor rights in a country where the owners of about 5,000 garment factories wield enormous influence. Factory owners are major political donors and have moved into news media, buying newspapers and television stations. In Parliament, roughly two-thirds of the members belong to the country’s three biggest business associations. At least 30 factory owners or their family members hold seats in Parliament, about 10 percent of the total.

“Politics and business is so enmeshed that one is kin to the other,” said Iftekharuzzaman, director of Transparency International Bangladesh.“There is a coalition between the sector and people in positions of power. The negotiating position of the workers is very, very limited.”

A Country Within a Country

Mohammad Helal Uddin joined Rosita Knitwear in May 2010 and was thrilled to have the job. Rosita was inside the new Ishwardi Export Processing Zone, not far from his home village, meaning he could live with his wife and two young daughters and not have to toil in the fields. “I feel I have a kind of dignity in this job,” he said.

Mr. Uddin, 28, worked in the knitting department and after six months was promoted, with a base salary of $55 a month. He soon began to notice irregularities. Workers were not getting promised annual raises, monthly attendance bonuses or the 17 paid holidays a year, beyond their usual one day off a week. Employees also said they worked four hours of overtime a day but were paid for only two.

Three decades ago, Bangladesh created a network of export zones to attract foreign investment with tax incentives and other benefits. Today, a large majority of Bangladesh’s garment factories lie outside these zones, but the zones are favored by foreign investors. Rosita and its sister factory, Megatex, both owned by the Hong Kong conglomerate South Ocean, were the first plants in the Ishwardi zone. Zones like Ishwardi operate like countries within a country. They are governed by a separate agency, the Bangladesh Export Processing Zones Authority, and by separate laws. By tradition, the authority has been run by a military officer, active duty or retired, and many factories have hired retired soldiers to oversee security.

For workers, wages were higher in the zones and conditions were better. But unions were initially banned, and workers had no right to organize until 2004 when Parliament, facing international pressure, approved worker associations at individual factories.

At the Rosita factory, workers elected a 15-member association last December, with Mr. Uddin as president. In January, a female employee complained that a Bangladeshi middle manager was pressuring her to have sex with one of the Chinese bosses. Enraged, workers demanded that the management address her complaint as well as the discrepancies over annual raises and earned leave. Six weeks of confrontation and chaos followed. In February, equipment in the Rosita factory was damaged during a rampage. Nearly 300 workers were accused of vandalism and fired, with their names posted on a blacklist at the gate of the Ishwardi zone. Mr. Uddin, who denied any wrongdoing, was fired and temporarily jailed.

(Page 3 of 4)

When he tried to return to work on Feb. 20, Mr. Uddin said two black-clad officers hustled him into the tiny guardhouse. The officers were members of the Rapid Action Battalion, a government paramilitary force infamous for vigilante attacks known as “cross fire” killings. He said one of the officers ordered him to sign a resignation letter.

“I didn’t do anything wrong,” Mr. Uddin said he told them.

He said one of the officers pushed a gun against his shoulder. “If you don’t sign,” the officer told him, according to Mr. Uddin, “we will take you in the car and you will have to face the cross-fire.”

Mr. Uddin signed. Inside the factories, according to several workers, police and paramilitary officers walked through the workrooms, holding termination letters. The message was clear: work or leave.

By March, an American labor rights group, the Institute for Global Labor and Human Rights, was advocating for the workers. A South Ocean executive arrived at Ishwardi and promised to address worker complaints over wages and unpaid leave. Then on March 20, workers discovered that managers had cut the piece rate, a type of production bonus, meaning a loss of wages. Another standoff ensued as managers closed the factories. But when workers returned March 25, the wage cut had not been fully restored.

Hundreds of workers gathered outside the front door of the factory in an impromptu sit-down strike. Eight workers, interviewed in June, said all the managers had left the factories. A small contingent of police officers soon arrived and ordered everyone back to work. A seamstress said a police officer knocked her to the ground, beating her unconscious with a stick and shredding her clothes. “I kept asking them to stop,” said the seamstress, who asked not to be identified, fearing reprisals. “But even after I fell to the ground, they kept beating me and pulled my hair.”

Workers began throwing stones and chanting slogans against the police, who fled. Hours later, after officials in Dhaka were notified, officers from the Rapid Action Battalion as well as surrounding police stations arrived. Officer Hossein, the police supervisor, denied that the police were aggressors, saying officers were told that foreign managers were trapped inside the factories and that angry workers were vandalizing equipment. “They attacked the police,” Officer Hossein said. “They started the violence.”

Cellphone videos show police officers firing rubber bullets and pummeling workers with cane poles. “They treated workers as if they were not human beings,” one worker said.

The Power Equation

Bangladesh’s two major political parties, the governing Awami League and the opposition Bangladesh Nationalist Party, often seem engaged in a blood feud. Yet, many analysts say, the two parties agree on one thing: safeguarding the garment industry.

Three months after the clash at Ishwardi, tens of thousands of angry workers protested near Dhaka, demanding higher wages and crippling one of the country’s most important industrial zones for more than a week. Riot police officers dispersed the protesters with tear gas and rubber bullets, as scores of people were injured.

Following huge protests in 2010, Ms. Hasina raised the minimum wage for garment workers to $37 a month from about $20. But her government has resisted the renewed worker demands, even as executives at some leading brands have voiced support for adjusting wages and expressed concerns about labor unrest.

In June, top executives at the Swedish retailer H&M fretted that recurring labor protests were disrupting production and called on Bangladeshi factories to rectify the situation.

Major brands have been stung by bad publicity. This year, War on Want, a nonprofit group, found that workers in five factories making products for Nike, Puma and Adidas were paid less than the minimum wage and complained of workplace abuse and sexual harassment. In March, the parent company of the Tommy Hilfiger brand, PVH Corp., hurriedly donated $1 million toward a factory safety initiative as ABC News was preparing to broadcast a report on a fire that killed 29 workers in a Bangladeshi factory making clothes for Tommy Hilfiger

(Page 4 of 4)

“They want to see better standards and conditions in factories in Bangladesh,” said Julia K. Hughes, president of the United States Association of Importers of Textiles and Apparel, a trade group in Washington. “No company is arguing that wages should not rise in Bangladesh. They are not saying what the wage should be, but absolutely wages should go up.”

But many factory owners are skeptical that buyers are truly willing to pay higher prices. One owner, Shawkat Ali Bhuiyan, said he had stopped working with companies like Walmart and Target because his profit margin was almost nonexistent, while some Bangladeshi labor leaders blame the foreign brands for exploiting workers.

“We need to clean up the whole supply chain,” said Roy Ramesh Chandra, a powerful public sector union leader. “The brands need to fulfill their responsibility. The manufacturers need to fulfill their responsibility. And the government should comply with international obligations and respect international labor standards.”

Bangladesh has responded to international pressure in the past, sharply curtailing child labor and improving safety conditions in the 1990s. Now, though, the pressure points are the rights of workers to organize and collectively bargain for wages, issues that require action by a political system dominated by business interests, including the garment sector.

A. K. Azad, president of the Federation of Bangladesh Chambers of Commerce and Industry, played down the garment sector’s political clout. “We are not powerful,” he said, adding: “Power lies with the politicians. Power lies with the media.”

But many apparel tycoons have also gone into politics or begun media careers, purchasing newspapers or starting independent news channels. Mr. Azad, who owns one of the country’s biggest garment factories, also owns a Bengali-language newspaper and a television station. Several Western diplomats privately noted that news coverage often emphasizes the disruptions caused by protests above the concerns of workers.

At the Rosita and Megatex factories, South Ocean management hired a labor oversight firm, Verité, which detailed a host of problems, including humiliation of workers, summary firings and deliberate interference with the ability of workers to organize. New management teams are now running the factories, and Verité is helping put in place changes to increase wages and protect worker rights. “South Ocean have taken labor issues at the two factories extremely seriously and have taken swift actions to address those issues,” the company’s law firm, Winston & Strawn of Hong Kong, said in a statement.

Many of the workers involved in the March 25 clash are back on the job, despite their anger over how they have been treated. The seamstress who was knocked unconscious, her clothes shredded, said she had little choice, since she was the family’s sole breadwinner. “I am helpless,” she said. “We have to get food.”

South Ocean dropped charges against Mr. Uddin but the police are still pursuing separate charges. Meanwhile, officials at the export zone authority have blacklisted him from being hired at factories inside the zones. “We spoke up,” he said. “And we became criminals in the eyes of all authorities.”