Govt to introduce Constitution Amendment Bill on GST in LS 05/08/2016

Govt to introduce Constitution Amendment Bill on GST in LS
05/08/2016 12:48
The government is likely to introduce the Constitution Amendment Bill on GST in Lok Sabha early next week, as the Finance Ministry is gearing up to implement the tax measure from April 1 next year, reported PTI.
The Rajya Sabha had earlier approved the Bill on the Goods and Services Tax.
Six official amendments, including scrapping of one per cent additional tax, were moved by the government which were approved by an overwhelming majority in the Upper House.
The bill was passed by the Lok Sabha earlier. Now it has to go back to the Lower House to incorporate the amendments approved by the Rajya Sabha. The bill will also have to be approved by 50 per cent of all the state assemblies.
Earlier, Revenue Secretary Hasmukh Adhia said that the government is looking at April 1, 2017 as the target date for implementation.
Adhia added that within the next 30 days, we expect 50 per cent of the states -- about 16 -- to approve the Constitution Amendment Bill.
Finance Minister Arun Jaitley has assured that the government is aiming for an optimal rate of taxation under GST regime though the final decision will be taken by the GST Council.
While the opposition is demanding for capping the interest rate at 18 per cent.
Once implemented, the GST will subsume various taxes including excise, services tax, octroi and other levies and the proceeds will be shared between the Centre and states.
Instead of goods being taxed multiple times at different rates, under the new GST regime goods would be taxed at point of consumption.

GST Bill a positive reform signal: Fitch 05/08/2016

GST Bill a positive reform signal: Fitch
05/08/2016 12:45

Fitch Ratings, a global rating agency, has said that passage of a long-awaited goods and services tax (GST) bill is an important reform which will remove barriers to trade, improve economic efficiency and lead to higher growth in the long run.
In addition, parliamentary approval sends a further positive signal of the government's ability to enact major reforms following the passage of a national bankruptcy law in May, the rating agency said.
The GST bill is a constitutional amendment which will allow for a single national indirect tax to replace a myriad of state and national taxes. This will result in a substantial simplification of the indirect tax system, leading to potentially significant productivity gains and boosting long-term growth.
Fitch said that it remains to be seen, though, whether the introduction of a national GST will lead to a higher intake of tax revenue. This will depend on a number of factors, such as the level at which the tax rate will be set. The rate still needs to be decided by the GST Council, which includes representatives from the Ministry of Finance and each state government, it said.
The introduction of national GST, though positive from a longer-term economic perspective, should not have a substantive effect on the fiscal account in the short term, the agency said. India's fiscal balances are a weak point of the sovereign's credit profile, with both general government debt and the deficit well above its 'BBB' peer medians. Fitch expects the debt to reach 69.4 per cent of GDP and the deficit to fall to 6.8 per cent in FY17, it added.
Fitch affirmed India's "BBB-" rating with a stable outlook last month.

GST rate to be optimum, working on time-bound rollout: FM 05/08/2016

GST rate to be optimum, working on time-bound rollout: FM
05/08/2016 12:38

As government looks to implement the Goods and Services Tax (GST) from April next year, Finance Minister Arun Jaitley said the tax rate will be "optimum" even as there were indications that it may be higher than 18 per cent, reported PTI.
A day after Rajya Sabha approved a constitutional amendment to pave the way for rollout of GST, he said the tax rate will be decided by the GST Council, which will have Union Finance Minister and representatives of all 29 states.
"We are going to try to make it reasonably as quick as possible... It is always good to set stiff targets and try meet them, rather than have no targets at all," he said.
Revenue Secretary Hasmukh Adhia said the Union Government would want half of the states to ratify the bill within the next 30 days so as to allow GST Council to finalise the legislations that will set the rate and other terms.
Jaitley said the government is targeting to bring the legislations -- the Central GST Bill and the Integrated GST (GST) Bill -- before the Parliament in the Winter Session of Parliament in November.
Chief Economic Adviser Arvind Subramanian, who had previously recommended a standard GST rate of 17-19 per cent, said while a GST rate of close to 22 per cent will put inflationary pressure, higher rate of 27 per cent will become totally self-defeating.
Adhia on the other hand said it would be "premature" to expect the GST's standard rate to be 18 per cent saying it would imply significant revenue losses.
Central excise duty and state VAT taken together added up to 27 per cent currently.
"I think what you need is an optimum rate... Currently what the tax payers are paying is phenomenally much higher... Now it will gradually slide down. But even in the first instance it will come down," Jaitley said.
The GST Bill passed by Rajya Sabha will have to go to Lok Sabha before it is sent to states for ratification.
On the impact of GST rollout on inflation, Jaitley said over the years, the tax rates will come down and hence the prices of many commodities will also decline.
"Over the long-term, tax rates will come down, and if tax rates come down then it is natural that many commodities will see lowering of prices. In the coming days, we will try that sooner we complete the roadmap and implement it," he said.
Unveiling the roadmap for GST roll out, Adhia said the government is looking at April 1, 2017, as the target date for implementation and 60,000 officers would be trained on GST laws and IT infrastructure framework by March next year.
Revenue Secretary Hasmukh Adhia listed seven challenges, which needed to be dealt with for smooth implementation of the Goods and Services Tax (GST).
These challenges include: calculation of revenue base of Centre and states and compensation requirements, structure of GST rates, list of exemptions, forming of consensus on Model GST Bill, threshold limits, compounding limits and cross empowerment to mitigate ill-effects of dual control.
Adhia said the GST rate structure should be such that it should not be obnoxious, which would meet the revenue requirement of state and Centre.
Citing media reports which gave examples based on 18 per cent GST rate, he said: "I would advice that these are premature calculation, particularly in items like car."
Jaitley said a balance will have to be created by the GST Council between states' need for funds for developmental activities as well as ensuring that the incidence on common man comes down.
"On almost 60-70 per cent of commodities on a weighted average you are paying 27 per cent plus a large number of small taxes. Some of the states have 30-32 per cent tax rate. The guiding principle laid by the Empowered Committee (of state finance ministers) is this rate has to come down," Jaitley said.
A panel headed by Subramanian had last year suggested 16.9-18.9 per cent 'standard' rate for bulk of goods and services while recommending 12 per cent for 'low rate goods' and 40 per cent for demerit goods like luxury car, aerated beverages, pan masala and tobacco. For precious metal, it recommended a range of 2-6 per cent.
While the CEA has suggested a tax band, states want a rate of 22-24 per cent.
Subramanian said: "At 27 per cent it is totally self-defeating... Up to 18-19 per cent there will be minimal impact on inflation and if it goes to 22 per cent there will be a few basis point increase."
Jaitley said the Chief Economic Advisor believes that a more reasonable rate is possible, but some states have a contrarian view.
He further said the government will try to roll out GST quickly. "Now which is the date by which we will be able to make it will have to be seen. It's always good to set stiff targets and try and meet them rather than have no targets at all".

RBI relaxes norms for cheque dishonor cases: Reports 05/08/2016

RBI relaxes norms for cheque dishonor cases: Reports
05/08/2016 10:52

The Reserve Bank of India has said that it has left it to the lender's discretion on whether to issue fresh chequebooks or not in cases of dishonour of Rs 1 crore and above. As per the existing directive, banks are not allowed to issue fresh chequebooks in the event of cheque dishonour valuing Rs 1 crore and above on four occasions during a financial year for want of sufficient funds. Commenting on the issue, a RBI Official told the media, "Banks should put in place an appropriate policy approved by the board or its committee taking into consideration the need to prevent misuse of cheque drawing facility and avoid penalising customers for unintended dishonour of cheques." The bank regulator also asked the banks to make this policy transparent and bring it to the knowledge of the customers.

India’s youth key to economic growth: DBS 05/08/2016

India’s youth key to economic growth: DBS
05/08/2016 09:58

According to a major Singapore-based bank DBS, India's young population will be an advantage for its economic growth as the country's GDP is likely to improve at 7.9 per cent for the year 2017-18. Commenting on the issue, DBS chief economist David Carbon told the media, "India, Indonesia and Philippines have growth potential supported by young population." “With India's working age population on the rise, the key differentiator vis a vis other Asian economies will be productivity gains,” he added. Meanwhile, DBS felt that the Goods and Services Tax (GST) implementation will boost economic growth to above 8 per cent by 2019-20, having negative implication in the short term soon after implementation. As per reports, the GST Constitutional Amendment Bill was cleared by the Rajya Sabha yesterday and is likely to be approved by the Lok Sabha this week after incorporating changes made by the Upper House.

Bad loan recovery top priority for Government: Rai 05/08/2016

Bad loan recovery top priority for Government: Rai
05/08/2016 09:57

Banks Board Bureau chairman Vinod Rai has said that recovery of bad loans is on the top of the government's agenda before going ahead with the consolidation of public sector lenders. Commenting on the issue, Banks Board Bureau chairman Vinod Rai told the media, "Recovery is absolutely on top of the agenda so that the lending process can start again. Just now banks are engaged in resolution of their stressed assets. So what we are proposing to do is to resolve that (bad loans issues) quickly first because we do not want to saddle banks with greater issues." “The gross non-performing assets of scheduled commercial banks rose to 7.6 per cent in March 2016 from 5.1 per cent in September 2015. The consolidation of banks is not a small issue and it requires a huge amount of human resources,” he added. As per reports, the Government will push for consolidation of public sector banks once they are recapitalised and strengthened.

States issued bonds under UDAY scheme to revive discoms: Min 05/08/2016

States issued bonds under UDAY scheme to revive discoms: Min
05/08/2016 09:56

The Indian Government has said that states have already issued bonds worth Rs 1.66 lakh crore under the UDAY scheme for revival of their debt-ridden discoms. Commenting on the issue, Power Minister Piyush Goyal told the media, "As on August 1, 2016, bonds worth Rs 1,66,754 crore have been issued by the participating states under UDAY and thus reduction in interest cost has already started. Cost of power is also on a downward trend." “A few states including Tamil Nadu and West Bengal have requested the central government to make certain modifications in the scheme. The government of India has already explained the details to them and also extended timeline to facilitate their participation," he added. As per reports, so far, 14 states -- Jharkhand, Chhattisgarh, Rajasthan, Uttar Pradesh, Gujarat, Bihar, Punjab, Jammu & Kashmir, Haryana, Uttarakhand, Goa, Karnataka, Manipur and Andhra Pradesh -- have signed memorandums of understanding (MoUs) under UDAY.

India expected to remain fastest growing economy: FM 05/08/2016

India expected to remain fastest growing economy: FM
05/08/2016 09:56

Finance Minister Arun Jaitley has said India is expected to remain the fastest growing major economy even as he stressed the government is making efforts to address various challenges including bad loans. The Minister also dismissed anxieties with regard to CSO data on the GDP numbers, saying that IMF, which is the most credible international body, has accepted the data. Commenting on the development, Finance Minister Arun Jaitley told the media, "For the last two years, we were the fastest growing economy in the world. I hope this year we will retain that position. The country recorded a growth rate of 7.2 per cent during 2014-15 and 7.6 per cent in 2015-16. “ "I think there is a big silver lining that after two consecutive years of bad monsoons, so far we are seeing good monsoon in the country and the result of this is that this will give rise to rural demand...This year I hope it will not only improve farm production but increase purchasing power of the rural sector," he added.

PSBs make one time settlement of Rs 3,445 cr loans this fiscal 05/08/2016

PSBs make one time settlement of Rs 3,445 cr loans this fiscal
05/08/2016 15:50

Public sector banks have settled loans worth Rs 3,445 crore through one-time settlement mechanism in the current financial year till June, government said as per the PTI report.
Reserve Bank of India (RBI) has provided the framework under which banks can have their own board approved policy for One Time Settlement (OTS) or compromise settlements.
Till June this fiscal, public sector banks settled loans to the tune of Rs 3,445 crore involving 1.44 lakh accounts through OTS, as per data provided by Finance Minister Arun Jaitley to the Lok Sabha.
During this period, State Bank of India settled the maximum amount of Rs 701 crore through OTS mechanism, followed by Indian Bank and Bank of Baroda which settled loans worth Rs 343 crore and Rs 305 crore respectively.
The loan amount settled through OTS stood at Rs 20,776 crore in 2015-16 involving nearly 9.45 lakh accounts. This compares to Rs 20,349 crore spread across 8.05 lakh accounts recorded in 2014-15.
"Every authority/officer sanctioning OTS should append a certificate stating that it has been done in conformity with RBI guidelines," Jaitley said in a written reply.
During Question Hour, Minister of State for Finance Santosh Gangwar said loans are given to small borrowers as per RBI guidelines and these are monitored.

Commission over 3-5% for fund raising will be illegal: Sebi 05/08/2016

Commission over 3-5% for fund raising will be illegal: Sebi
05/08/2016 14:29
Noting that the 'push factor' of paying high commission to sales force is a driving force for proliferation of illegal deposit schemes, market regulator Sebi today said such payouts for sale of all fund-raising will be capped at 5 per cent to prevent mis-selling, reported PTI.
"The 'push factor' was brought to the notice of the Standing Committee of Parliament which has recently submitted a report on change in legislation and one of the things which they have accepted is the existence of this push factor," Sebi whole-time member S Raman said as per the media report.
"Now, very soon, if the legislation is passed, and when it is passed, commission of anything more than 3-5 per cent for any type of fund raising in this country will be illegal."
Stating that in the last three years since it was empowered with changes in the statutes, Sebi has passed 325 orders against such unscrupulous schemes, Raman said Sebi has found that greed of higher returns is not the biggest driving factors as interest offered is only 10-12 per cent.
He said it was found that at times, agents were paid up to 35 per cent of the amount as commissions which resulted in such products getting pushed.
In order to curb the activities of such illegal deposit taking done by companies like Sahara and PACL, the Government will be tabling the 'The Banning of Unregulated Deposit Schemes and Protection of Depositors' Interests Bill' in Parliament during the ongoing session.
According to reports, the Bill seeks to create special courts at the state level to handle cases of such frauds, and has provisions of jail terms of up to five years.
Raman, who was speaking on the sidelines of an event at RBI to launch a special website for the State Level Coordination Committee (SLCC) initiative, also suggested the inclusion of the Enforcement Directorate and Agriculture Ministry's cooperatives department on the panels.
He said there is "huge element of money laundering" in such schemes due to which it is essential to have ED in the panel, while the cooperatives department is essential because it regulates the multi-state cooperative societies.

MFs' foreign liabilities rise by Rs 2,310 cr in FY16 05/08/2016

MFs' foreign liabilities rise by Rs 2,310 cr in FY16
05/08/2016 14:24

Foreign liabilities of mutual funds (MFs) increased by Rs 2,310 crore to Rs 58,170 crore at market value during 2015-16 financial year, reported PTI.
Units issued to non-residents, which had a dominant share within liabilities, increased from Rs 55,810 crore in March 2015 to Rs 58,120 crore in March 2016, though the increase in terms of face value was much lower, from Rs 23,540 crore to Rs 25,940 crore, over the same period, the RBI data showed.
Other foreign liabilities arising out of unpaid income / dividends to non-residents, sale proceeds pending repatriation, marginally declined.
On the contrary to the movements in foreign liabilities of MFs, their foreign assets declined by Rs 210 crore during 2015-16 to Rs 3,850 crore in March 2016, where equity securities had an overwhelming share of Rs 3,830 crore.
"As a consequence, net foreign liabilities of MFs increased by Rs 2,530 crore during 2015-16 to Rs 54,320 crore (USD 8.2 billion) in March 2016," RBI said.
In case of foreign liabilities, the UAE, Singapore, the UK, Mauritius and the US together accounted for 47.7 per cent and 46.7 per cent share at face value and market value, respectively.
In regards to foreign assets, Luxembourg continued to be the major overseas investment destination (equity securities held abroad) of MFs, followed by the US.
In case of asset management companies (AMCs), foreign liabilities increased by Rs 550 crore during 2015-16 to Rs 4,380 crore in March 2016.
Foreign assets of AMCs increased from Rs 220 crore to Rs 390 crore during the year and, as a consequence, their net foreign liabilities increased by Rs 390 crore during 2015-16 to around Rs 4000 crore in March 2016.
The UK accounted for the maximum share in foreign liabilities, followed by Mauritius and Japan. Guernsey and Singapore together accounted for around 73 per cent of total foreign assets of AMCs in March 2016.
Foreign Direct Investors' reinvested earnings in the AMCs, estimated from their share in the difference between company's net profit and distributed dividends, increased from Rs 350 crore in 2014-15 to Rs 540 crore in 2015-16.

Govt to roll out online platform for SEZs to raise issues 05/08/2016

Govt to roll out online platform for SEZs to raise issues
05/08/2016 14:19

The union government will soon roll out a web-based platform for special economic zones (SEZs) to raise their concerns and action taken may be provided by the concerned authority, a top Union Commerce Ministry official said at an ASSOCHAM event on Thursday.
“This will provide a platform for constant dialogue and transparency in resolution of issues. I intend to roll it out as soon as possible,” said Alok V. Chaturvedi, additional secretary, Department of Commerce while inaugurating 10th SEZ Convention organized by ASSOCHAM.
“The software is already in place, we need to adopt it for our requirement, efforts have already been made in this direction,” said Chaturvedi.
He added that the online platform would be on the lines of a project monitoring group system in the cabinet secretariat.
Highlighting the issue of lifting of Minimum Alternative Tax (MAT) and Dividend Distribution Tax (DDT) concerning the SEZ sector, Chaturvedi said, “MAT appears to be unfair for SEZ units and it is not in tune with the Government philosophy of stable tax regime, we have taken up the issue with Finance Ministry.”
“According to Finance Ministry, MAT has been imposed to partly recoup the loss of revenue due to profit-linked exemptions. They are bringing down average rate of corporate tax. However, we have taken it up again in view of adverse export conditions and the stellar role played by SEZ in the export growth and the employment generation,” he said.
“Alternative suggestions regarding reduction of MAT from 20.5 per cent to 7.5 per cent or extension of period of ten years till the entire MAT credit is adjusted against the tax liability of SEZ will also be taken up with Finance Department,” he added.
Talking about the contribution of SEZs in growth of India’s economy, he said that over 200 SEZs are operational while over 400 SEZs have been formally approved. Total investment in SEZs is over USD 50 billion and they are providing direct employment to over 1.5 million persons.

Railways form JV with Chhattisgarh govt for rail projects 05/08/2016

Railways form JV with Chhattisgarh govt for rail projects
05/08/2016 14:16

The railways joined hands with the Chhattisgarh government in forming a joint venture company for faster execution of rail projects in the state, reported PTI.
Describing the occasion as "significant", Railway Minister Suresh Prabhu said, "Today's agreement with the Chhattisgarh government will accelerate the economy of the country as it is a state with abundant natural resources."
The expansion of the rail network in Chhattisgarh will help faster goods movement, including coal transportation for power plants.
Prabhu said proper exploration and supply of coal and other excavation items can boost the country's economy.
To expand railway network across the country, the railways has taken initiative for formation of JV companies with states.
While 17 states have consented for formation of such companies and eight states have signed MOUs with the ministry this regard, Chhattisgarh has become the third state to sign JV agreement after Odisha and Haryana.
Prabhu said to meet the demands of the people, it is better that all state governments join hands with the Railway Ministry and become partners with it.
Signing of such agreements is in line with the Prime Minister's philosophy of cooperative federalism, he added.
Chhattisgarh Chief Minister Raman Singh, who was present on the occasion, thanked the railways for supporting the state for development of rail infrastructure.
Singh said 760 kms of additional railway lines have been spread in the state in a very short span of time which in itself is a record.
The improved railway network has helped the state in processing the natural resources in its full potential, he said.
Minister of State for Power and Coal Piyush Goyal said the formation of JV company in Chhattisgarh will help in improving the congested rail lines.
Due to the effort of the railways, coal is available in all the power plants of the country and that too with surplus stock, Goyal said and added that signing of the agreement is "a very forward looking and visionary step".
The JV company will have 51 per cent share from Chhattisgarh government and 49 per cent from the Ministry of Railways and will work in identifying projects which may be taken up in the state.
The company will have its headquarter at Raipur or Naya Raipur.

GST to boost textile exports: Indian Texpreneurs Federation 05/08/2016

GST to boost textile exports: Indian Texpreneurs Federation
05/08/2016 12:41

Textile industry in the region welcomed the passage of GST bill by Rajya Sabha, terming it as one of the biggest and transformational reforms in the economic history of the country and said it would pave the way for growth of exports, reported PTI.
Thanking Prime Minister and the finance minister for this historic reform, Indian Texpreneurs Federation (ITF), an apex body of textile sector, expressed confidence about the positive impacts of GST on overall economic growth in the next few years and said it would make the manufacturing sector more competitive.
As far as the textile sector, being an essential item for the common man, textile items should be kept under GST with the minimum possible tax slab with the special rates, ITF Secretary Prabhu Dhamodharan said in a statement.
It was an opportunity for the government to bring the entire textile sector under tax net and this move will bring more transparency in the system and will trigger growth, he said.
Tirupur Exporters' Association President A Shaktivel said GST would give a push for export of garments and described it as a "game changing" reforms.
In a letter to Prime Minister Narendra Modi, he said exporters were happy to note that consensus had been built to pass the much-awaited GST Bill.
The industries and the people will get benefit out of the introduction of GST in the system, he said and requested the Finance Minister to address any issues arise in exports further to implementation of GST system.

Govt to set up mega food parks under Sagarmala project 05/08/2016

Govt to set up mega food parks under Sagarmala project
05/08/2016 09:58

The Indian Government has said that it is setting up two mega food parks at a cost of Rs 324 crore in Andhra Pradesh and Maharashtra under its ambitious Sagarmala project. Commenting on the issue, Ministry of Shipping Official told the media, "As part of the Sagarmala Programme of the Ministry of Shipping, two mega food parks projects are being implemented in Kakinada, Andhra Pradesh and southern Maharashtra by the Ministry of Food Processing." “The projects are strategically situated in CEZs (Coastal Economic Zone) with proximity to ports and will give boost to the EXIM trade for food processing sector. The Andhra Pradesh Industrial Infrastructure Corporation mega food park at Krishna with its proximity to Visakhapatnam and Kakinada port will draw its synergies from Vizag-Chennai Industrial Corridor (VCIC) in North Andhra Pradesh,” he added. As per reports, the proximity to various ports for these industrial clusters and CEZs will provide necessary infrastructural facilities and connectivity to the hinterland, thus ensuring reduction in logistic costs.

Silver rises on strong global cues 05/08/2016

Silver rises on strong global cues
05/08/2016 09:03

Silver futures closed higher in the international market on Thursday as traders created speculative positions taking positive cues from the global market Market analysts said a firming trend in the precious metals in global market, mainly attributed to the rise in silver prices at futures trade.

Gold rises as Bank of England cut rate 05/08/2016

Gold rises as Bank of England cut rate
05/08/2016 09:01

Gold futures closed higher in the international market on Thursday after the Bank of England announced a rate cut for the first time since 2009 and unveiled a batch of stimulus measures aimed at stimulating the country’s economy in the wake of the June 23 vote to exit the European Union. Although the rate cut was expected, the additional stimulus measures surprised the market, and providing a jolt to haven assets. This, coupled with easing measures from the Bank of Japan earlier in the week, are being viewed as supportive to the long-term outlook for gold prices.

Shipping Corporation inks MoU with GoI 04/08/2016

Shipping Corporation inks MoU with GoI
04/08/2016 11:01

Shipping Corporation of India (SCI) has signed the Memorandum of Understanding with the Ministry of Shipping for the financial year 2016-17. The MOU is based on the MOU guidelines 2016-17 issued by the Department of Public Enterprises (DPE), said an official statement. It consists of parameters drawn on the prescribed evaluation criteria and factors such as capacity and its expansion, business environment, projects under implementation have been considered. SCI has set ambitious, growth oriented and aspirational targets against these parameters keeping its growth plans and objectives in view. These are also in line with the vision of the Ministry of Shipping and the Government of India to escalate the growth for the Maritime sector in India. The MoU will be periodically reviewed by the Ministry and the performance of the PSU would be evaluated and ratings awarded at the end of the financial year. The shipping industry is cyclical and is presently experiencing a down turn. The freight rates have come under pressure due to overcapacity of ships and are subject to a lot of volatility. Despite unfavourable market conditions and down turn being faced by the shipping industry in general, the SCI has taken proactive measures for sustained growth in these challenging times including costs-saving and has reported a consolidated net profit of Rs.389.4 crores for the financial year 2015-16. SCI has ambitious CAPEX plans in 2016-17 to augment its tonnage through acquisition of second hand vessels. SCI has been entrusted with the management of ONGC's MODUs 'Sagar Vijay' and 'Sagar Bhushan' for a period of six years. It has also been entrusted with the technical management of A&N owned 17 Foreshore vessels.

Govt okays upgradation of 13 medical colleges 04/08/2016

Govt okays upgradation of 13 medical colleges
04/08/2016 10:56
The Cabinet Committee on Economic Affairs on Wednesday approved upgradation of 13 existing government Medical Colleges or Institutes (GMCIs) across the country. The decision was taken at a meeting chaired by the Prime Minister Narendra Modi. The medical colleges would be upgraded under Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), according to an official statement. The government has approved the upgradation of 13 colleges in eight states, three in Bihar, two each in Uttar Pradesh, Gujarat and Chhattisgarh. While one medical college of Delhi, Madhya Pradesh, Odisha and Rajasthan would also be upgraded, the release said. The government has set the time of 36 months for the upgradation of the medical colleges, it added. The central government would share 60 per cent of the total cost of upgradation, while the rest of the 40 per cent would be shared by the state government, it said. Under PMSSY, 58 government medical colleges have been approved for upgradation, of which, work in 16 colleges has been completed while in rest of the colleges the work is still in progress.

India to add 5,200 MW solar capacity in FY-17: CARE 04/08/2016

India to add 5,200 MW solar capacity in FY-17: CARE
04/08/2016 10:45

CARE Ratings has said that India is set to add 5,200 MW solar capacity this fiscal with various states coming out with policies for the sector. According to a study conducted by the ratings agency, out of total installed renewable energy capacity of 42,750 MW as on March 31, the share of solar energy increased to 15.82 per cent, as against 13.8 per cent in 2014-15. As per reports, various states such as Andhra Pradesh, Chhattisgarh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana and Uttar Pradesh have come out with policies for awarding solar power projects. Commenting on the issue, a CARE Official told the media, “After witnessing record capacity addition of around 3 GW in FY16, 1,000 MW in the first quarter of this fiscal, and bids of around 6,000 MW awarded over the last six months or so, the solar sector is on a strong growth path.” "Nearly 5,200 MW is likely to be added this fiscal and 8,000 MW in FY2016-17," he added.

Cabinet approves Motor Vehicle (Amendment) Bill 2016 04/08/2016

Cabinet approves Motor Vehicle (Amendment) Bill 2016
04/08/2016 08:48

The union cabinet on Wednesday approved Motor Vehicle (Amendment) Bill 2016, which aims to improve road safety and transport scenario in the country. In the present Motor Vehicle Act, there are 223 Sections out of which the Bill aims to amend 68 sections whereas Chapters 10 has been deleted and a Chapter 11 is being replaced with new provisions to simplify third party insurance claims and settlement process. The important provisions include increase in compensation for Hit & Run cases from Rs. 25000 to Rs 2 lakhs. It also has provision for payment of compensation upto Rs 10 lakh in road accidents fatalities. The Bill also proposes insertion of 28 new sections. The amendments mainly focus on issues relating to improving road safety, citizens’ facilitation while dealing with the Transport Department. Strengthening rural transport, last mile connectivity and public transport, automation and computerization and enabling online services. It also propose to improve the transport scenario in the country by permitting the States to grant exemptions in Stage carriage and contract carriage permits for promoting rural transport, public transport, last mile connectivity and for passenger convenience and road safety. The Bill proposes that the State Government can specify a multiplier, not less than one and not greater than ten, to be applied to each fine under this Act and such modified fine. The proposed bill proposes that the State Government can regulate the activities in a public place of pedestrians and such means of transport. Improving delivery of services to the stakeholders using e-Governance is one of the major focuses of this Bill. This include enabling online learning licenses, increasing validity period for driving licenses, doing away with the requirements of educational qualifications for transport licenses are some of the features. Transport Minister Nitin Gadkari has termed the Motor vehicle (Amendment) 2016 passed by cabinet as biggest reforms in the Road Safety & transport sector. He has expressed his gratitude to Prime Minister for his guidance & Support.

Cabinet okays usage charge for upcoming spectrum auctions 04/08/2016

Cabinet okays usage charge for upcoming spectrum auctions
04/08/2016 08:48

The Union Cabinet, chaired by the Prime Minister Narendra Modi, on Wednesday approved the rates for spectrum usage charge (SUC) for various bands of spectrum for which auction are going to be conducted shortly. With this decision the path is clear for issuance of the notice inviting application for spectrum auction by the department of telecommunications, according to a Cabinet statement. As per the decision of the cabinet, spectrum acquired in forthcoming auction in 700, 800, 900, 1800, 2100, 2300 & 2500 MHz band is to be charged at the rate of 3 per cent of Adjusted Gross Revenue (AGR) excluding the revenue from wire-line services. The weighted average of SUC rates across all spectrum assigned to an operator (whether assigned administratively or through auction or through trading) in all access spectrum bands including BWA spectrum obtained in 2010 auction shall be applied for charging SUC subject to a minimum of 3 per cent of AGR excluding revenues from wire-line services. The weighted average is to be derived by sum of product of spectrum holdings and applicable SUC rate divided by total spectrum holding. The Weighted Average Rate shall be determined operator wise for each service area. This will facilitate to move to a simple, transparent and flat ad-valorem SUC regime in accordance with the law and avoid creative accounting to bypass the revenues, said Cabinet statement.

CCEA allows NHAI to monetise publicly-funded road projects 04/08/2016

CCEA allows NHAI to monetise publicly-funded road projects
04/08/2016 08:46

The Cabinet Committee on Economic Affairs (CCEA) has authorized National Highways Authority of India (NHAI) to monetize public funded national highway projects which are operational and are generating toll revenues for at least two years after the commercial operations Date (COD) through the toll operate transfer (TOT) Model. The monetization will be subject to approval of the competent authority in ministry of road transport and highways (MoRTH) or NHAI on a case to case basis, according to a Cabinet statement. Monetization of public funded NH roads is expected to create a framework for attracting long term institutional investment on the strength of future toll receivables. Around 75 operational NH projects completed under public funding have been preliminarily identified for potential monetization using the TOT Model. This model would provide an efficient operation and maintenance (O&M) framework requiring reduced involvement of NHAI in projects post construction completion. Further, the corpus generated from proceeds of such project monetization could be utilized by the Government to meet its fund requirements regarding future development and O&M of highways in the country. This could address development of highways in unviable geographies. The model would facilitate efficient toll realization through private sector. This approval would ensure better O&M of public funded NH stretches resulting in enhanced quality of service for highway users across the country. Further, the fund generated from such monetization shall be utilized for development of highways in the country, which would benefit highway users throughout the country.

GST Bill to address tax ambiguities, spur growth: ICT industry 04/08/2016

GST Bill to address tax ambiguities, spur growth: ICT industry
04/08/2016 13:15

Indian telecom and technology companies said passage of the GST Bill will facilitate ease of doing business and address ambiguities in the current indirect tax landscape, thus benefiting the economy, reported PTI.
Terming GST Bill as a "transformational" legislation, Bharti Enterprises Chairman Sunil Bharti Mittal said it will help prop up GDP growth by an additional 1.5-2 per cent.
"The transformational legislation will not just significantly improve ease of doing business in a vast and complex federal setup like ours by creating a single market but will help prop up our GDP growth rate by an additional 1.5 - 2 per cent," Mittal said as per the media report.
Wipro CEO Abidali Z Neemuchwala exuded confidence that implementation of GST would go a long way in strengthening the economy "as one common market for taxation".
Microsoft India Chairman Bhaskar Pramanik said the development will address the ambiguities of the current indirect tax landscape, proving beneficial for the economy at large.
Telecom industry body COAI asked the government to ensure that the rate applied for telecom services does not exceed the existing 15 per cent to meet the Centre's vision of affordable services and a connected digital India.
Consumer products like mobile phones and laptops may become cheaper as the overall taxes on goods are likely to come down.
Acer CFO Alok Dubey said while the calculation of pricing will remain speculative till the final GST rate on each product category is known, "with GST, overall taxes on goods are likely to come down and make them cheaper."
Handset maker Intex said the uniform tax regime will boost operational efficiencies, increase cost savings and make products competitive. "GST will spur higher consumption...In the long run these factors will raise India's GDP growth by one or two points, generating millions of new jobs," Intex CMD Narendra Bansal said as per the PTI report.
Industry body MAIT said GST would also put to rest the ambiguity around the treatment of 'intangibles' like software and the concept of dual levy of taxes.
It added that the hardware sector is hopeful that IT Agreement products would be notified under the lower merit rate which is expected to be 12 per cent.
At the same time, the industry also pointed out certain drawbacks in the Bill that was passed by the Rajya Sabha.
"One of the major drawbacks or the most critical cause of potential failure of GST will be in the transference of responsibility of tax compliance and remittance to the customers to make them eligible for input credit," said Bharat Goenka, Co-Founder and MD, Tally Solutions.
This would lead to trust deficit, extend credit cycles choking working capital, and increase complexities in businesses, he said.
"We welcome the passing of the Constitutional Amendment Bill paving the way for implementation of GST in the country. We congratulate the government on this significant milestone," Neemuchwala said.
He said implementation of the GST would go a long way in strengthening the economy as one common market for taxation as well as address key issues of transparency, ease of doing business and simplification of tax laws.
Neemuchwala said in the process of implementing GST through legislations, "we must collectively ensure there is no drifting away from the intent of the Bill and the cornerstone principles of this government in improving ease of doing business and reduced tax related litigation in India."
"I am sure the government would engage meaningfully with the industry on its concerns and arrive at an effective framework for implementation of GST," he added.

GST Bill: Five things to know about India's biggest tax reform 04/08/2016

GST Bill: Five things to know about India's biggest tax reform
04/08/2016 13:14

In a historic move, the Rajya Sabha on Wednesday passed the Constitution amendment bill to roll out the long pending goods and services (GST) tax which is being considered as the biggest tax reform since independence.
What is GST?
The Goods and Services Tax Bill, officially known as The Constitution (122 Amendment) Bill, 2014, proposes a national value added tax to be implemented in India which will amalgamate several Central and State taxes into a single tax, facilitating a common national market.
When will it come into effect?
The Finance Minister Arun Jaitley is planning to bring GST into operation by April 2017, but it look like a distant dream as a lot of work need to be done before then. The government has to pass the amended Bill in the Lok Sabha and also need to get approval from 50 per cent of state assemblies. It will then be approved by the President to rollout of the new tax regime.
How does it work?
GST is one indirect tax for the whole nation, which will make India one unified common market.
GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.
How would GST be administered in India?
Keeping in mind the federal structure of India, there will be two components of GST – Central GST (CGST) and State GST (SGST). Both Centre and States will simultaneously levy GST across the value chain. Tax will be levied on every supply of goods and services. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State. The input tax credit of CGST would be available for discharging the CGST liability on the output at each stage. Similarly, the credit of SGST paid on inputs would be allowed for paying the SGST on output. No cross utilization of credit would be permitted.
What are the benefits of GST?
For Consumers:
Easy compliance: A robust and comprehensive IT system would be the foundation of the GST regime in India. Therefore, all tax payer services such as registrations, returns, payments, etc. would be available to the taxpayers online, which would make compliance easy and transparent.
Uniformity of tax rates and structures: GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business.
Removal of cascading: A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes.
Gain to manufacturers and exporters: The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services.
For Central and State Governments:
Simple and easy to administer: Multiple indirect taxes at the Central and State levels are being replaced by GST. Backed with a robust end-to-end IT system, GST would be simpler and easier to administer than all other indirect taxes of the Centre and State levied so far.
Better controls on leakage: GST will result in better tax compliance due to a robust IT infrastructure. Due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an in-built mechanism in the design of GST that would incentivize tax compliance by traders.
Higher revenue efficiency: GST is expected to decrease the cost of collection of tax revenues of the Government, and will therefore, lead to higher revenue efficiency.
For the consumer:
Single and transparent tax proportionate to the value of goods and services: Under GST, there would be only one tax from the manufacturer to the consumer, leading to transparency of taxes paid to the final consumer.
Relief in overall tax burden: Because of efficiency gains and prevention of leakages, the overall tax burden on most commodities will come down, which will benefit consumers.

GST to create multiple taxation points for IT industry: Nasscom 04/08/2016

GST to create multiple taxation points for IT industry: Nasscom
04/08/2016 13:12

The GST regime would streamline the taxation system and make it much more transparent, but would also create multiple taxation points, which will be a "challenge" for the IT industry, Nasscom said as per the PTI report.
Nasscom President R Chandrasekhar said the concerns regarding multiple taxation points have been brought to the notice of the government and it expects a positive response while framing the GST law.
"IT services are intangible. The way things are looked at in the GST law, not the Constitution amendment, there we have a number of concerns which have been shared with the government.
"We feel that today for IT services, it is a simple regime. One single point of taxation which is central service tax, one single point of registration, one single invoice, one single place where you have to go for any refund.
"Now under GST regime, it could be as high as 111 points because you have CGST (Central GST), IGST (Interstate GST) and SGST (State GST). All put together, it becomes 111 different (taxation) points," he told reporters on the sidelines of a programme.
Chandrasekhar said moving from single to multiple points could be a challenge from the point of view of ease of doing business.
He said he met Finance Minister Arun Jaitley, who assured him that these issues would be looked into.
"What we are clearly given to understand is that post the Constitution Amendment Bill, serious discussions will take place on which all key service sectors will be impacted, notably the IT-BPM sector, telecom sector and BFSI sector. These are the service sectors which will have the maximum impact from the GST, which need special attention," he added.

GST to have positive impact on realty sector 04/08/2016

GST to have positive impact on realty sector
04/08/2016 13:10

According to property developers and consultants, execution of the GST law will have a positive impact on the real estate sector with expected decline in its tax burden.
The enactment of this law will single-handedly resolve many of the challenges faced by the real estate sector and help in pulling the sluggish sector out of its long slumber. Heavy taxes that are being paid currently by the developers will automatically go down by a considerable percentage.
Under GST, developers would see lesser burden of tax on input items like cement, and steel, as tax credits would be available for set off at various stages. This can lead to lower construction costs for developers across all asset classes, which could likely be passed on to property buyers.
The direct impact of GST on real estate, in terms of tax outflow for developers and consumers, will depend on whether the final GST rate is more or less than the taxes paid currently.
Apart from the significant reduction in tax management expenses due to a single unified tax, the compliance costs will go down too.
However, the fact that the stamp duty allocated on property is not subsumed in the GST could prove to be a dampener for buyers.

EPFO investments in equities get return over 12% in year 04/08/2016

EPFO investments in equities get return over 12% in year
04/08/2016 12:45

As on July 31, 2016, we got a return of over 12 per cent on investments in equities as compared to 8 or 7.5 per cent on government securities (G-Secs) within a year, said Shankar Aggarwal, Secretary, Ministry of Labour and Employment at an ASSOCHAM event on Wednesday.
“If you are going to invest wisely in a pool of equity then surely there is not much of a risk”, said Shankar Aggarwal. He also said that as on July 31, 2016, we got a return of over 12 percent on equity as compared to 8 or 7.5 percent on G-Secs, , said Aggarwal while inaugurating ‘National Conference on Social Security & Role of Equity Market,’ organised by the ASSOCHAM.
The Employees' Provident Fund Organisation (EPFO) started investing in exchange traded funds (ETFs) in August last year and has invested Rs 7,465 crore till June 30, 016, said Aggarwal
The Employees' Provident Fund Organisation can invest up to 15 per cent of its investible deposits in equity or equity related scheme, the body had decided to park 5 per cent of its available funds in ETFs to start with.
“We cannot evaluate the performance of equity on the basis of one, two or three months. When we invest in equity, we invest for 20 or 30 years," said Mr. Aggarwal while addressing the meeting.
The Employees' Provident Fund Organisation (EPFO) started investing in exchange traded funds (ETFs) in August last year and has invested Rs 7,465 crore till June 30, 2016. EPFO can invest up to 15 per cent of its investible deposits in equity or equity related scheme, the body had decided to park 5 per cent of its available funds in ETFs to start with.
Aggarwal said, social security is very important tool to improve the productivity, to improve the level of motivation, passion and commitment. When they grow old and unable to perform any productive work, at that point of time we have to take care of them.
We will enable to create one seamless platform which will enable every citizen from organized sector or un-organized sector to get on board and to get advantage or benefits of social security, said Mr. Shankar.

Cabinet okays proposal to peg central schemes at 30 04/08/2016

Cabinet okays proposal to peg central schemes at 30
04/08/2016 11:46

The Union Cabinet has given its nod to the major recommendations of the Sub-Group of Chief Ministers on rationalisation of Centrally Sponsored Schemes (CSSs), which had suggested that the total number of schemes should not normally exceed 30. It had also recommended that CSSs should be divided into "core" and "optional" schemes. "The Union Cabinet chaired by the Prime Minister Narendra Modi has accepted the major recommendations of the Sub-Group of Chief Ministers on Rationalisation of Centrally Sponsored Schemes (CSSs). The Sub-Group had examined 66 CSSs and recommended that the number of CSSs should not normally exceed 30," an official release said. It said that the rationalisation of the CSSs would ensure optimum utilisation of resources with better outcomes through area specific interventions. "This would also ensure wider reach of the benefits to the target groups," it added. National Social Assistance Programme, Mahatma Gandhi National Rural Employment Guarantee Programme, Umbrella Scheme for Development of Scheduled Castes, Umbrella Scheme for Development of Scheduled Tribes and Umbrella Programme for Development of Minorities are some of the core schemes.

Govt approves investment of Rs 4404 cr to 8 states, UTs 04/08/2016

Govt approves investment of Rs 4404 cr to 8 states, UTs
04/08/2016 11:14

In order improve basic urban infrastructure in eight states and Union Territories, the government has approved an investment of Rs 4,404 crore under Atal Mission for Rejuvenation and Urban Transformation (AMRUT). Out of this, the central assistance to would be to the tune of Rs 2,085 crore, an official statement said. An inter-ministerial Apex Committee, chaired by Urban Development Secretary Rajiv Gauba, has approved the State Level Annual Action Plans (SAAP) of these eight states/UTs, it said. The government has increased the grant, for improvement in drainage network in urban areas, from Rs 281 crore in last fiscal to Rs 759 crore this year. Under AMRUT, states/UTs have proposed a total investment of Rs 1,146 crore in improving drainage network in urban areas. The amount of Rs 4,404 crore approved would be used for augmenting water supply, sewerage networks, drainage, urban transport and public and green spaces in urban areas in these areas, it said. States and UTs for which investment approved include Karnataka (Rs 1,625 crore), Andhra Pradesh (Rs 877 crore), Bihar (Rs 775 crore), Telangana (Rs 555 crore), Haryana (Rs 525 crore), Nagaland (Rs 40 crore), Dadra and Nagar Haveli (Rs 3.70 crore) and Andaman & Nicobar Islands (Rs 3.18 crore). Total central assistance to be provided to them would be Rs 2,085 crore--Karnataka Rs 772 crore, Bihar Rs 388 crore, Andhra Pradesh Rs 352 crore, Telangana Rs 277 crore, Haryana Rs 255 crore and Nagaland Rs 36 crore. Total cost of the two UTs--Dadra and Nagar Haveli and Andaman & Nicobar Islands--would be borne by the Centre, it said. Gauba said the States/UTs that AMRUT Action Plans for the next three years would be cleared in the last quarter of this financial year. Under AMRUT, lauched in June last year, the Centre will provide an assistance of Rs 50,000 crore for the five year mission period to the states/UTs. During the current financial year (2016-17), the Urban Development Ministry had approved total investments of Rs 19,213 crore under the scheme for 20 states/UTs.