RBI says 36% of total bad loans from six key
sectors
The Reserve Bank has said about 36 per cent of the overall 4.1 per cent bad assets in the system have been created by six sectors of the economy - infrastructure, metals, textiles, chemicals, engineering and mining. These sectors, though, have only 30 per cent of the credit share.
The central bank, in its annual report for FY2013-14, said gross non-performing assets in the system have grown to 4.1 per cent in FY'14 from 3.4 per cent a year ago. It also said the contribution of mandatory priority sector loans to the overall bad assets have come down during the last fiscal.
Stating that the state-run banks are the chief sources of stress, RBI said these six specifically identified sectors of infrastructure, metals and products, textiles, chemical and chemical products, engineering industries and mining and quarrying alone contributed 36 per cent of gross NPAs, as against their 30 per cent contribution to total advances.
The gross non-performing assets ratio for the non-priority sector grew to 4 per cent as of March 2014 as against 3 per cent in the year ago period, while the same for priority sector stood stable at 4.4 per cent, it said. On reports of some improvement shown by the banks in the asset quality in the fourth quarter, the RBI hinted at there not being a cause for celebration yet, as this was due to the asset sales to ARCs.
Additionally, it also highlighted the lurking threat, pointing out at the high growth in restructured assets during the previous fiscal 2012-13. It said the asset sales by all banks rose to Rs 127.1 billion in the March quarter, as against Rs 35.7 billion in the previous quarter and Rs 6 billion in the quarter before.
In the overall asset quality stress scenario, gross NPAs at the state-run lenders rose to 4.7 per cent as against 3.8 per cent in the year ago period, while foreign banks also showed a rise in NPAs to 3.9 per cent from 3 per cent.
Private sector banks provided some relief despite the overall gloomy business climate, with their gross NPAs being stable at 1.9 per cent, the RBI said.
In the financial stability report released December last year, the RBI had estimated that gross NPAs increase to a peak of 4.6 per cent in September 2014, (from 4.2 per cent in September 2013) and then improve to 4.4 per cent in March 2015. Lending to the retail sector was the succour to the banks during this time, and the RBI annual report also cemented this point with data pointing to an increase in credit, coupled with a decline in NPAs.
There was a marginal increase in share of retail credit to 19 per cent of gross credit as of March 2014, but gross NPAs from this portfolio declined to 2 per cent from 2.3 per cent in FY'13, the RBI said.
What are NPA’s?
A Non-performing asset (NPA) is defined as a credit facility in respect of which the interest and/or installment of principal has remained ‘past due’ for a specified period of time NPA is a classification used by financial institutions that refer to loans that are in jeopardy of default. Once the borrower has failed to make interest or principle payments for 90 days the loan is considered to be a non-performing asset. Non-performing assets are problematic for financial institutions since they depend on interest payments for income. Troublesome pressure from the economy can lead to a sharp increase in non-performing loans and often results in massive write-downs.
The Reserve Bank has said about 36 per cent of the overall 4.1 per cent bad assets in the system have been created by six sectors of the economy - infrastructure, metals, textiles, chemicals, engineering and mining. These sectors, though, have only 30 per cent of the credit share.
The central bank, in its annual report for FY2013-14, said gross non-performing assets in the system have grown to 4.1 per cent in FY'14 from 3.4 per cent a year ago. It also said the contribution of mandatory priority sector loans to the overall bad assets have come down during the last fiscal.
Stating that the state-run banks are the chief sources of stress, RBI said these six specifically identified sectors of infrastructure, metals and products, textiles, chemical and chemical products, engineering industries and mining and quarrying alone contributed 36 per cent of gross NPAs, as against their 30 per cent contribution to total advances.
The gross non-performing assets ratio for the non-priority sector grew to 4 per cent as of March 2014 as against 3 per cent in the year ago period, while the same for priority sector stood stable at 4.4 per cent, it said. On reports of some improvement shown by the banks in the asset quality in the fourth quarter, the RBI hinted at there not being a cause for celebration yet, as this was due to the asset sales to ARCs.
Additionally, it also highlighted the lurking threat, pointing out at the high growth in restructured assets during the previous fiscal 2012-13. It said the asset sales by all banks rose to Rs 127.1 billion in the March quarter, as against Rs 35.7 billion in the previous quarter and Rs 6 billion in the quarter before.
In the overall asset quality stress scenario, gross NPAs at the state-run lenders rose to 4.7 per cent as against 3.8 per cent in the year ago period, while foreign banks also showed a rise in NPAs to 3.9 per cent from 3 per cent.
Private sector banks provided some relief despite the overall gloomy business climate, with their gross NPAs being stable at 1.9 per cent, the RBI said.
In the financial stability report released December last year, the RBI had estimated that gross NPAs increase to a peak of 4.6 per cent in September 2014, (from 4.2 per cent in September 2013) and then improve to 4.4 per cent in March 2015. Lending to the retail sector was the succour to the banks during this time, and the RBI annual report also cemented this point with data pointing to an increase in credit, coupled with a decline in NPAs.
There was a marginal increase in share of retail credit to 19 per cent of gross credit as of March 2014, but gross NPAs from this portfolio declined to 2 per cent from 2.3 per cent in FY'13, the RBI said.
What are NPA’s?
A Non-performing asset (NPA) is defined as a credit facility in respect of which the interest and/or installment of principal has remained ‘past due’ for a specified period of time NPA is a classification used by financial institutions that refer to loans that are in jeopardy of default. Once the borrower has failed to make interest or principle payments for 90 days the loan is considered to be a non-performing asset. Non-performing assets are problematic for financial institutions since they depend on interest payments for income. Troublesome pressure from the economy can lead to a sharp increase in non-performing loans and often results in massive write-downs.
Competition panel imposes Rs 2,545cr
The companies penalized by the competition watchdog were Maruti Suzuki, Tata Motors, Honda Siel Cars India, Volkswagen India, Fiat India, BMW India, Ford India, General Motors India, Hindustan Motors, Mahindra & Mahindra, Mercedes-Benz India, Nissan Motor India, Skoda Auto India and Toyota Kirloskar Motor. The penalty - two per cent of these companies' average turnover in the past three years - will have to be deposited within 60 days of receipt of the order.
A detailed investigation by the competition watchdog had revealed these carmakers violated rules with respect to agreements with local original equipment suppliers, as well as pacts with authorized dealers.
The companies penalized by the competition watchdog were Maruti Suzuki, Tata Motors, Honda Siel Cars India, Volkswagen India, Fiat India, BMW India, Ford India, General Motors India, Hindustan Motors, Mahindra & Mahindra, Mercedes-Benz India, Nissan Motor India, Skoda Auto India and Toyota Kirloskar Motor. The penalty - two per cent of these companies' average turnover in the past three years - will have to be deposited within 60 days of receipt of the order.
A detailed investigation by the competition watchdog had revealed these carmakers violated rules with respect to agreements with local original equipment suppliers, as well as pacts with authorized dealers.
Green nod to 3 investment zones
The environment ministry has given its approval to three projects and finalized terms of reference for two others to be built on the Delhi-Mumbai Industrial Corridor (DMIC). The projects which got clearance on July 30 were the Dholera investment region in Gujarat; Manesar-Bawal investment region in Haryana; and Khuskhera-Bhiwadi-Neemrana investment region in Rajasthan.
The ministry’s statutory appraisal panel finalized the terms of reference for the construction of the Dighi Port industrial area in Maharashtra and the development of the Pithampur-Dhar-Mhow investment region in Madhya Pradesh. All these are on the dedicated freight corridor (DFC), part of DMIC, which aims to develop industrial zones between Delhi and Mumbai covering 1,483 kilometers through six states.
The Dholera investment region plans to build electronics, pharmaceuticals, automobile general manufacturing, agro and food processing and tourism sectors. The Manesar-Bawal region will take up projects related to engineering, technology, future technology, consumer products and service sectors. The Khushkhera-Bhiwadi-Neemrana investment region will deal with metal products, consumer-oriented sectors.
The environment ministry has given its approval to three projects and finalized terms of reference for two others to be built on the Delhi-Mumbai Industrial Corridor (DMIC). The projects which got clearance on July 30 were the Dholera investment region in Gujarat; Manesar-Bawal investment region in Haryana; and Khuskhera-Bhiwadi-Neemrana investment region in Rajasthan.
The ministry’s statutory appraisal panel finalized the terms of reference for the construction of the Dighi Port industrial area in Maharashtra and the development of the Pithampur-Dhar-Mhow investment region in Madhya Pradesh. All these are on the dedicated freight corridor (DFC), part of DMIC, which aims to develop industrial zones between Delhi and Mumbai covering 1,483 kilometers through six states.
The Dholera investment region plans to build electronics, pharmaceuticals, automobile general manufacturing, agro and food processing and tourism sectors. The Manesar-Bawal region will take up projects related to engineering, technology, future technology, consumer products and service sectors. The Khushkhera-Bhiwadi-Neemrana investment region will deal with metal products, consumer-oriented sectors.
Government notifies new FDI rules for Defense
sector
The Cabinet Committee on Security will be the final decision making body for Foreign Direct Investment (FDI) proposals in Defense beyond 49 per cent. This is even when the proposed inflow is in excess of Rs 1,200 crore.
According to the new rules on FDI in Defense notified by the Department of Industrial Policy & Promotion, based on the Cabinet decision early this month, FDI proposals beyond 49 per cent vetted by the CCS need not be cleared by the Cabinet Committee on Economic Affairs (CCEA). So far, all FDI proposals with foreign investments over Rs 1,200 crore had to be cleared by the CCEA.
The FDI limit to be cleared through the Foreign Investment Promotion Board (FIPB) route has been raised to 49 per cent from 26 per cent. The cap is composite and includes different types of foreign investments such as FDI, Foreign Institutional Investors (FIIs), Foreign Portfolio Investors (FPIs), Non-Resident Indians (NRIs), Foreign Venture Capital Investors (FVCI) and Qualified Foreign Investors (QFIs), it said. Further, portfolio investment by FPIs, FIIs, NRIs, QFIs and investments by FVCIs together will not exceed 24 per cent of the total equity of the investee or Joint Venture Company.
The final clearance for FDI proposals within the 49 per cent limit will be given by the CCEA in case foreign investments exceed Rs 1,200 crore. All decisions on FDI applications will be normally communicated within a time frame of 10 weeks from the date of acknowledgement, the note said. The licence applications will be considered and given by the DIPP in consultation with the Ministries of Defence and External Affairs.
The note specifically laid down that the applicant company seeking permission of the Government for FDI up to 49 per cent should be an Indian company owned and controlled by resident Indian citizens. The management of the applicant company should be in Indian hands.
However, for proposals seeking approval for foreign investment beyond 49 per cent, the applicant could be an Indian company or a foreign investor. The condition of Indian management control is also not applicable in this case.
What is FDI?
Foreign direct investment (FDI) is a direct investment into production or business in a country by an individual or company of another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds.
The Cabinet Committee on Security will be the final decision making body for Foreign Direct Investment (FDI) proposals in Defense beyond 49 per cent. This is even when the proposed inflow is in excess of Rs 1,200 crore.
According to the new rules on FDI in Defense notified by the Department of Industrial Policy & Promotion, based on the Cabinet decision early this month, FDI proposals beyond 49 per cent vetted by the CCS need not be cleared by the Cabinet Committee on Economic Affairs (CCEA). So far, all FDI proposals with foreign investments over Rs 1,200 crore had to be cleared by the CCEA.
The FDI limit to be cleared through the Foreign Investment Promotion Board (FIPB) route has been raised to 49 per cent from 26 per cent. The cap is composite and includes different types of foreign investments such as FDI, Foreign Institutional Investors (FIIs), Foreign Portfolio Investors (FPIs), Non-Resident Indians (NRIs), Foreign Venture Capital Investors (FVCI) and Qualified Foreign Investors (QFIs), it said. Further, portfolio investment by FPIs, FIIs, NRIs, QFIs and investments by FVCIs together will not exceed 24 per cent of the total equity of the investee or Joint Venture Company.
The final clearance for FDI proposals within the 49 per cent limit will be given by the CCEA in case foreign investments exceed Rs 1,200 crore. All decisions on FDI applications will be normally communicated within a time frame of 10 weeks from the date of acknowledgement, the note said. The licence applications will be considered and given by the DIPP in consultation with the Ministries of Defence and External Affairs.
The note specifically laid down that the applicant company seeking permission of the Government for FDI up to 49 per cent should be an Indian company owned and controlled by resident Indian citizens. The management of the applicant company should be in Indian hands.
However, for proposals seeking approval for foreign investment beyond 49 per cent, the applicant could be an Indian company or a foreign investor. The condition of Indian management control is also not applicable in this case.
What is FDI?
Foreign direct investment (FDI) is a direct investment into production or business in a country by an individual or company of another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds.
Diesel decontrol on hold for now
The Ministry of Petroleum and Natural Gas has stopped short of proposing complete deregulation of diesel prices. In an inter-ministerial note on the pricing mechanism for petroleum products, the Ministry has endorsed the existing system of raising diesel prices by up to 50 paisa a liter every month.
Once retailers bring their rates in sync with market prices, a fresh proposal will be put up for the Cabinet Committee on Political Affairs to consider decontrol, the note said. Petrol prices have already been deregulated.
The Ministry of Petroleum and Natural Gas has stopped short of proposing complete deregulation of diesel prices. In an inter-ministerial note on the pricing mechanism for petroleum products, the Ministry has endorsed the existing system of raising diesel prices by up to 50 paisa a liter every month.
Once retailers bring their rates in sync with market prices, a fresh proposal will be put up for the Cabinet Committee on Political Affairs to consider decontrol, the note said. Petrol prices have already been deregulated.
EPF interest rate @ at 8.75 %
The Employees' Provident Fund Organization (EPFO) on 26th August announced a rate of interest of 8.75 per cent on provident fund deposits for the current fiscal year (2014-15), a move which would benefit its over five crore subscribers across the country.
The decision to retain the interest rate at 8.75 per cent was taken at a meeting of the Central Board of Trustees - the apex decision making body of EPFO - chaired by Labor Minister Narendra Singh Tomar in Delhi. As per practice, the decision by retirement fund body EPFO's trustees would be implemented after the concurrence of the Finance Ministry. The sum assured under EDLI is provided in proportion to monthly wage ceiling which is Rs. 6,500 at present. It would be enhanced to Rs.15, 000 per month soon.
The Employees' Provident Fund Organization (EPFO) on 26th August announced a rate of interest of 8.75 per cent on provident fund deposits for the current fiscal year (2014-15), a move which would benefit its over five crore subscribers across the country.
The decision to retain the interest rate at 8.75 per cent was taken at a meeting of the Central Board of Trustees - the apex decision making body of EPFO - chaired by Labor Minister Narendra Singh Tomar in Delhi. As per practice, the decision by retirement fund body EPFO's trustees would be implemented after the concurrence of the Finance Ministry. The sum assured under EDLI is provided in proportion to monthly wage ceiling which is Rs. 6,500 at present. It would be enhanced to Rs.15, 000 per month soon.
India must increase milk production to 7.8
million tones
The National Dairy Development Board (NDDB) has said India must increase the average incremental milk production from 4 million tons (mt) in the last 10 years to 7.8 mt in the next 8 years to meet the growing demand. India’s estimated demand for milk is expected to be about 155 mt by 2016-17 and 200 mt in 2021-22
The National Dairy Development Board (NDDB) has said India must increase the average incremental milk production from 4 million tons (mt) in the last 10 years to 7.8 mt in the next 8 years to meet the growing demand. India’s estimated demand for milk is expected to be about 155 mt by 2016-17 and 200 mt in 2021-22
Government notifies rules allowing 100% FDI in
Railways
The Government has notified new foreign direct investment norms for the Railways allowing 100 per cent foreign investments through the automatic route in a number of areas.
These include suburban corridor projects through the public private partnership (PPP) route, high-speed train systems, rolling stock including trans sets, coaches manufacturing and maintenance facilities, railway electrification, signaling systems, freight terminals, passenger terminals and infrastructure in industrial parks like railway line and sidings. However, FDI will not be allowed in train operations and safety.
The Government has notified new foreign direct investment norms for the Railways allowing 100 per cent foreign investments through the automatic route in a number of areas.
These include suburban corridor projects through the public private partnership (PPP) route, high-speed train systems, rolling stock including trans sets, coaches manufacturing and maintenance facilities, railway electrification, signaling systems, freight terminals, passenger terminals and infrastructure in industrial parks like railway line and sidings. However, FDI will not be allowed in train operations and safety.
Cabinet lifts ‘one subsidized LPG cylinder a
month’ cap
Cooking gas consumers will now get 12 cylinders of 14.2-kg at subsidized rate in a year, even if they don’t consume one bottle/month. The Cabinet, in its meeting on 27th August, decided that while 12 subsidized LPG cylinders a year will continue to be supplied to all domestic consumers, there will be no separate monthly restriction. This changes the earlier decision taken on February 28. The Cabinet Committee on Economic Affairs decided to empower the Road Ministry to decide the mode of delivery of projects.
Cooking gas consumers will now get 12 cylinders of 14.2-kg at subsidized rate in a year, even if they don’t consume one bottle/month. The Cabinet, in its meeting on 27th August, decided that while 12 subsidized LPG cylinders a year will continue to be supplied to all domestic consumers, there will be no separate monthly restriction. This changes the earlier decision taken on February 28. The Cabinet Committee on Economic Affairs decided to empower the Road Ministry to decide the mode of delivery of projects.
Reserve bank simplifies norms to refinance ECBs
The Reserve Bank of India (RBI) has delegated to banks the power to approve in cases where the average maturity period of fresh external commercial borrowing (ECB) is more than the residual maturity of an existing one. Till now, RBI decided such cases.
It has specified some conditions.. The all-in cost of fresh ECB should be less than that of all-in cost of existing ECB. And, both borrowings should comply with the applicable guidelines. The refinancing in such cases is to be undertaken before the existing ECB matures.
And, the borrower should not be in the default or caution list of RBI and not be under investigation by the directorate of enforcement. Foreign branches or subsidiaries of Indian banks will not be permitted to refinance an existing ECB this way.
This facility will be available even when existing ECB was raised under the approval route, subject to the amount of new ECB being eligible to be raised under the automatic route. All other aspects of ECB policy have been kept unchanged.
The Reserve Bank of India (RBI) has delegated to banks the power to approve in cases where the average maturity period of fresh external commercial borrowing (ECB) is more than the residual maturity of an existing one. Till now, RBI decided such cases.
It has specified some conditions.. The all-in cost of fresh ECB should be less than that of all-in cost of existing ECB. And, both borrowings should comply with the applicable guidelines. The refinancing in such cases is to be undertaken before the existing ECB matures.
And, the borrower should not be in the default or caution list of RBI and not be under investigation by the directorate of enforcement. Foreign branches or subsidiaries of Indian banks will not be permitted to refinance an existing ECB this way.
This facility will be available even when existing ECB was raised under the approval route, subject to the amount of new ECB being eligible to be raised under the automatic route. All other aspects of ECB policy have been kept unchanged.
Union government launched financial inclusion
scheme
Banks opened a record 15 million accounts on 28th August, against a target of 10 million, as Prime Minister Narendra Modi launched massive financial inclusion programme, the Pradhan Mantri Jan Dhan Yojana. The scheme aims to take banking facilities to 75 million households by January 26, 2015, against the earlier deadline of August 15, 2015.
For this, banks have to open another 60 million accounts in five months. To help lenders meet the target, the prime minister announced a life cover of Rs 30,000 for all those opening bank accounts by January 26. Under the scheme, each customer will also get a RuPay debit card, with an in-built accident insurance cover of Rs 1 lakh and an overdraft facility of Rs 5,000, subject to satisfactory operations of the account for at least six months.
The life cover would be free for the scheme's beneficiaries. For the debit card, a fee of 50 paise will be charged per transaction. The scheme simultaneously launched the scheme at 600 programmes and 77,852 camps across the country. The prime minister also launched a mobile banking facility on basic phones; now, one can transfer funds and check the available balance using any handset, through the SMS platform. Under the Jan Dhan Yojana, all benefits from the Centre/states/local bodies are proposed to be transferred to the accounts of beneficiaries.
Also, the government will push the Direct Benefits Transfer (DBT) scheme and try to restart it for liquefied petroleum gas. It is likely the National Rural Employment Guarantee Scheme will be included under DBT. For the entire exercise, the existing banking network will be strengthened - it will rope in an additional 50,000 business correspondents and set up about 7,000 branches and 20,000 new automated teller machines, in the first phase.
Banks opened a record 15 million accounts on 28th August, against a target of 10 million, as Prime Minister Narendra Modi launched massive financial inclusion programme, the Pradhan Mantri Jan Dhan Yojana. The scheme aims to take banking facilities to 75 million households by January 26, 2015, against the earlier deadline of August 15, 2015.
For this, banks have to open another 60 million accounts in five months. To help lenders meet the target, the prime minister announced a life cover of Rs 30,000 for all those opening bank accounts by January 26. Under the scheme, each customer will also get a RuPay debit card, with an in-built accident insurance cover of Rs 1 lakh and an overdraft facility of Rs 5,000, subject to satisfactory operations of the account for at least six months.
The life cover would be free for the scheme's beneficiaries. For the debit card, a fee of 50 paise will be charged per transaction. The scheme simultaneously launched the scheme at 600 programmes and 77,852 camps across the country. The prime minister also launched a mobile banking facility on basic phones; now, one can transfer funds and check the available balance using any handset, through the SMS platform. Under the Jan Dhan Yojana, all benefits from the Centre/states/local bodies are proposed to be transferred to the accounts of beneficiaries.
Also, the government will push the Direct Benefits Transfer (DBT) scheme and try to restart it for liquefied petroleum gas. It is likely the National Rural Employment Guarantee Scheme will be included under DBT. For the entire exercise, the existing banking network will be strengthened - it will rope in an additional 50,000 business correspondents and set up about 7,000 branches and 20,000 new automated teller machines, in the first phase.
Vijay Kelkar panel on gas prices
To make new exploration and production activities viable, a committee under former finance secretary Vijay Kelkar has recommended market-linked pricing for domestic natural gas. The suggestion comes amid ongoing consultations by a committee of secretaries on a new gas-pricing formula.
The committee, set up in 2013 to "prepare a road map for enhancing domestic production and sustainable reduction in import dependence by 2030", had brought out its first report in January. According to it, market-driven prices for gas will create a gas market in the country by increasing supply. Natural gas prices should be free from government intervention, it said.
In the interim, the government should develop transnational gas pipeline infra to connect demand and supply centers across the country, frame guidelines for effective regulation through the Petroleum and Natural Gas Regulatory Board and develop additional gas sources like coal-bed methane and shale, besides encouraging trading in spot and future contracts for gas, it suggested.
It suggested till market-linked prices were arrived at, the difference between market and subsidized prices of gas should be reduced, in line with fiscal-consolidation initiatives.
Deliberating on subsidized sales, the panel noted it was unfair to supply natural gas at artificially low prices to all consumers, including those who could afford to pay higher prices, to support the priority sectors of power and fertilizers. Priority sectors could be supported by the government, which would get more taxes and royalty from a higher price, owing to transparent and targeted subsidies, the panel said.
To make new exploration and production activities viable, a committee under former finance secretary Vijay Kelkar has recommended market-linked pricing for domestic natural gas. The suggestion comes amid ongoing consultations by a committee of secretaries on a new gas-pricing formula.
The committee, set up in 2013 to "prepare a road map for enhancing domestic production and sustainable reduction in import dependence by 2030", had brought out its first report in January. According to it, market-driven prices for gas will create a gas market in the country by increasing supply. Natural gas prices should be free from government intervention, it said.
In the interim, the government should develop transnational gas pipeline infra to connect demand and supply centers across the country, frame guidelines for effective regulation through the Petroleum and Natural Gas Regulatory Board and develop additional gas sources like coal-bed methane and shale, besides encouraging trading in spot and future contracts for gas, it suggested.
It suggested till market-linked prices were arrived at, the difference between market and subsidized prices of gas should be reduced, in line with fiscal-consolidation initiatives.
Deliberating on subsidized sales, the panel noted it was unfair to supply natural gas at artificially low prices to all consumers, including those who could afford to pay higher prices, to support the priority sectors of power and fertilizers. Priority sectors could be supported by the government, which would get more taxes and royalty from a higher price, owing to transparent and targeted subsidies, the panel said.
CBDT sets up committee to decide retro tax
cases
The Central Board of Direct Taxes today set up a high-level committee to scrutinize all Income Tax cases arising out of the retrospective tax amendment.
The four-member committee will be headed by the Joint Secretary of the Foreign Tax and Tax Research-I unit of the CBDT. It will decide on such cases within of 60 days of receiving them from the Assessing Officer. It will be incumbent upon the AO to approach the committee when faced with an I-T case that is for the period before April, 2012.
The other members on the panel include Joint Secretary (Tax Planning and Legislation-I), the Commissioner of Income Tax Appeals and the Director (Foreign Tax and Tax Research-I), who will also be the Secretary of the committee.
According to the terms of reference for the new committee, it would, on receipt of the reference from the Assessing Officer "shall examine the proposed action of the Assessing Officer and after providing an opportunity to the assesses, take a decision on the proposed action".
The Central Board of Direct Taxes today set up a high-level committee to scrutinize all Income Tax cases arising out of the retrospective tax amendment.
The four-member committee will be headed by the Joint Secretary of the Foreign Tax and Tax Research-I unit of the CBDT. It will decide on such cases within of 60 days of receiving them from the Assessing Officer. It will be incumbent upon the AO to approach the committee when faced with an I-T case that is for the period before April, 2012.
The other members on the panel include Joint Secretary (Tax Planning and Legislation-I), the Commissioner of Income Tax Appeals and the Director (Foreign Tax and Tax Research-I), who will also be the Secretary of the committee.
According to the terms of reference for the new committee, it would, on receipt of the reference from the Assessing Officer "shall examine the proposed action of the Assessing Officer and after providing an opportunity to the assesses, take a decision on the proposed action".
Minimum pension of Rs 1000 under EPFO
The minimum monthly pension of Rs 1,000 for Employees’ Provident Fund Organization (EPFO) subscribers and increase in wage ceiling to Rs 15,000 a month will come into effect from September 1.
The minimum monthly pension of Rs 1,000 for Employees’ Provident Fund Organization (EPFO) subscribers and increase in wage ceiling to Rs 15,000 a month will come into effect from September 1.
Public debt rises to Rs. 6 lakh crore in June
quarter of 2015
India's public debt rose sharply to Rs. 6 lakh crore in the April-June period 2014 from Rs. 5, 63,911 crore in the corresponding period last year. For fiscal year 2014-15, gross and net market borrowing of Rs. 6 lakh crore and Rs. 4.61 lakh crore, respectively, show an increase of 6.4 per cent and 1.6 per cent over 2013-14, a finance ministry statement said.
In April-June quarter of 2013-14, gross market borrowing was over Rs.5.63 lakh crore and net borrowing was over Rs. 4.53 lakh crore. During Q1 of FY15, the government issued dated securities worth Rs.1.98 lakh crore, higher than Rs. 1.51 lakh crore in Q1 of last fiscal.
The public debt of Rs. 6 lakh crore excludes liabilities under the 'Public Account'. The total public debt increased by 3.7 per cent in June quarter, from previous March quarter.
What is Public debt?
Public debt, which is also sometimes referred to as government debt, is all of the money owed at any given time by any branch of the government. It encompasses debt owed by the federal government, the state government, and even the municipal and local government. It is, in effect, an extension of personal debt, since individuals make up the revenue stream of the government. Public debt accrues over time when the government spends more money than it collects in taxation. As a government engages in more deficit spending,the amount of debt increases.
Many different types of debt make up public debt. A great deal of it is external debt, which is money that is owed by the government to foreign lenders, either in the form of international organizations, other governments, or groups like sovereign wealth funds, which invest in government bonds. Government debt is also made up of internal debt, where citizens and groups within the country lend the government money to continue operating. In some ways, this is a lot like lending to oneself, since ultimately the responsibility for it falls back on the very people lending money.
India's public debt rose sharply to Rs. 6 lakh crore in the April-June period 2014 from Rs. 5, 63,911 crore in the corresponding period last year. For fiscal year 2014-15, gross and net market borrowing of Rs. 6 lakh crore and Rs. 4.61 lakh crore, respectively, show an increase of 6.4 per cent and 1.6 per cent over 2013-14, a finance ministry statement said.
In April-June quarter of 2013-14, gross market borrowing was over Rs.5.63 lakh crore and net borrowing was over Rs. 4.53 lakh crore. During Q1 of FY15, the government issued dated securities worth Rs.1.98 lakh crore, higher than Rs. 1.51 lakh crore in Q1 of last fiscal.
The public debt of Rs. 6 lakh crore excludes liabilities under the 'Public Account'. The total public debt increased by 3.7 per cent in June quarter, from previous March quarter.
What is Public debt?
Public debt, which is also sometimes referred to as government debt, is all of the money owed at any given time by any branch of the government. It encompasses debt owed by the federal government, the state government, and even the municipal and local government. It is, in effect, an extension of personal debt, since individuals make up the revenue stream of the government. Public debt accrues over time when the government spends more money than it collects in taxation. As a government engages in more deficit spending,the amount of debt increases.
Many different types of debt make up public debt. A great deal of it is external debt, which is money that is owed by the government to foreign lenders, either in the form of international organizations, other governments, or groups like sovereign wealth funds, which invest in government bonds. Government debt is also made up of internal debt, where citizens and groups within the country lend the government money to continue operating. In some ways, this is a lot like lending to oneself, since ultimately the responsibility for it falls back on the very people lending money.
GDP grows 5.7% in June quarter, most in 2 years
For the quarter ended June this year, India’s economy grew at a nine-quarter high of 5.7 per cent, compared with 4.6 per cent in the previous quarter, driven largely by industry, even as the biggest segment of the services sector — trade, hotels, transport and communications — remained subdued, official data showed on 29th August. For the June quarter of 2013-14, gross domestic product (GDP) had increased 4.7 per cent. During the June 2014-15 quarter, the agriculture segment expanded 3.8 per cent, against 6.3 per cent in the previous quarter and four per cent in the corresponding period of 2013-14.
The construction space expanded 4.8 per cent in the June quarter, against only 0.7 per cent in the previous quarter and 1.1 per cent in the year-ago period. The key indicators of construction, production of cement and consumption of finished steel, registered growth of 9.5 per cent and 0.7 per cent, respectively. During the quarter, the mining segment recorded growth of 2.1 per cent, following eight quarters of declines or stagnation.
Services, the biggest sector of the Indian economy, didn’t fare very well, rising 6.8 per cent, slightly higher than 6.42 per cent in the previous quarter. However, it was lower compared with the 7.2 per cent growth seen in April-June, 2013-14.
For the quarter ended June this year, India’s economy grew at a nine-quarter high of 5.7 per cent, compared with 4.6 per cent in the previous quarter, driven largely by industry, even as the biggest segment of the services sector — trade, hotels, transport and communications — remained subdued, official data showed on 29th August. For the June quarter of 2013-14, gross domestic product (GDP) had increased 4.7 per cent. During the June 2014-15 quarter, the agriculture segment expanded 3.8 per cent, against 6.3 per cent in the previous quarter and four per cent in the corresponding period of 2013-14.
The construction space expanded 4.8 per cent in the June quarter, against only 0.7 per cent in the previous quarter and 1.1 per cent in the year-ago period. The key indicators of construction, production of cement and consumption of finished steel, registered growth of 9.5 per cent and 0.7 per cent, respectively. During the quarter, the mining segment recorded growth of 2.1 per cent, following eight quarters of declines or stagnation.
Services, the biggest sector of the Indian economy, didn’t fare very well, rising 6.8 per cent, slightly higher than 6.42 per cent in the previous quarter. However, it was lower compared with the 7.2 per cent growth seen in April-June, 2013-14.
Fiscal deficit already at 61.2% of full-year
target
The Centre's fiscal deficit touched 61.2 per cent of the full-year Budget Estimate (BE) in April-July, only a notch lower than the 62.8 per cent in the same period last year. The deficit constituted 10.5 per cent of gross domestic product (GDP) in the first quarter (April-June) of the current financial year, slightly higher than 10.3 per cent in the corresponding period last year.
The government has pegged its fiscal deficit, the gap between its expenditure and receipts, at Rs 5.31 lakh crore or 4.1 per cent of GDP this year. According to the data issued on Friday by the Controller General of Accounts (CGA), it touched Rs 3.24 lakh crore in April-July, the first four months of 2014-15.
If the government spends more than Rs 2.06 lakh crore in the remaining eight months of the financial year, the deficit will swell, forcing it to borrow more from the market to finance this. This might crowd out private investment and put pressure on interest rates and inflation. The data issued by the CGA showed total expenditure during April-July at Rs 5.03 lakh crore or 28.1 per cent of the entire year's estimate, against 31.3 per cent last year.
Plan expenditure in the four-month period this year was Rs 1.32 lakh crore or 23 per cent of the BE, compared with 27 per cent in the year-ago period. Non-Plan expenditure at Rs 3.71 lakh crore or 30.5 per cent of the BE was also lower from 33.5 per cent in April-July 2013-14. If expenditure was lower than last year, so were revenue receipts. Total receipts in April-July this year were Rs 1.79 lakh crore or 14.2 per cent of the full-year estimate, compared with 16.1 per cent in the corresponding period of the previous year. Of this, tax receipts were Rs 1.46 lakh crore, which is 15 per cent of the BE.
What is Fiscal Deficit?
When a government's total expenditures exceed the revenue that it generates (excluding money from borrowings). Deficit differs from debt, which is an accumulation of yearly deficits.)
Difference between Fiscal deficit and Current Deficit
Current account deficit means imports are larger than exports, or negative net exports. Fiscal deficit means government expenditure is larger than tax revenues. If saving=investment, then current account deficit= fiscal deficit.
What is Plan and Non plan expenditure?
Of these, plan expenditures are estimated after discussions between each of the ministries concerned and the Planning Commission. Non-plan revenue expenditure is accounted for by interest payments, subsidies (mainly on food and fertilizers), wage and salary payments to government employees, grants to States and Union Territories governments, pensions, police, economic services in various sectors, other general services such as tax collection, social services, and grants to foreign governments.
Non-plan capital expenditure mainly includes defense, loans to public enterprises, loans to States, Union Territories and foreign governments.
The Centre's fiscal deficit touched 61.2 per cent of the full-year Budget Estimate (BE) in April-July, only a notch lower than the 62.8 per cent in the same period last year. The deficit constituted 10.5 per cent of gross domestic product (GDP) in the first quarter (April-June) of the current financial year, slightly higher than 10.3 per cent in the corresponding period last year.
The government has pegged its fiscal deficit, the gap between its expenditure and receipts, at Rs 5.31 lakh crore or 4.1 per cent of GDP this year. According to the data issued on Friday by the Controller General of Accounts (CGA), it touched Rs 3.24 lakh crore in April-July, the first four months of 2014-15.
If the government spends more than Rs 2.06 lakh crore in the remaining eight months of the financial year, the deficit will swell, forcing it to borrow more from the market to finance this. This might crowd out private investment and put pressure on interest rates and inflation. The data issued by the CGA showed total expenditure during April-July at Rs 5.03 lakh crore or 28.1 per cent of the entire year's estimate, against 31.3 per cent last year.
Plan expenditure in the four-month period this year was Rs 1.32 lakh crore or 23 per cent of the BE, compared with 27 per cent in the year-ago period. Non-Plan expenditure at Rs 3.71 lakh crore or 30.5 per cent of the BE was also lower from 33.5 per cent in April-July 2013-14. If expenditure was lower than last year, so were revenue receipts. Total receipts in April-July this year were Rs 1.79 lakh crore or 14.2 per cent of the full-year estimate, compared with 16.1 per cent in the corresponding period of the previous year. Of this, tax receipts were Rs 1.46 lakh crore, which is 15 per cent of the BE.
What is Fiscal Deficit?
When a government's total expenditures exceed the revenue that it generates (excluding money from borrowings). Deficit differs from debt, which is an accumulation of yearly deficits.)
Difference between Fiscal deficit and Current Deficit
Current account deficit means imports are larger than exports, or negative net exports. Fiscal deficit means government expenditure is larger than tax revenues. If saving=investment, then current account deficit= fiscal deficit.
What is Plan and Non plan expenditure?
Of these, plan expenditures are estimated after discussions between each of the ministries concerned and the Planning Commission. Non-plan revenue expenditure is accounted for by interest payments, subsidies (mainly on food and fertilizers), wage and salary payments to government employees, grants to States and Union Territories governments, pensions, police, economic services in various sectors, other general services such as tax collection, social services, and grants to foreign governments.
Non-plan capital expenditure mainly includes defense, loans to public enterprises, loans to States, Union Territories and foreign governments.
Services grew 6.8% in June quarter
The services sector showed a lower growth of 6.8 per cent in April-June this year, against 7.2 per cent in the year-ago period, the financial year's first quarter. The growth was relatively less in trade, hotels, transport and communication. It is, however, more than the 6.4 per cent growth posted in January-March, the final quarter of the earlier financial year, 2013-14.
According to the data issued on 29th August by the Central Statistics Office, the highest growth in the services category in the June quarter was in financial services at 10.4 per cent. Lower, though, than the 12.9 per cent growth in the corresponding quarter of last year and 12.4 per cent in January-March.
About service sector
Also known as the tertiary sector, the development of a country's services sector is an indicator of its economic development. India's services sector is a vital component of its economy, as it presently accounts for around 60 per cent of its gross domestic product (GDP). It has matured considerably during the last few years and has been globally recognized for its high growth and development.
The growth in the services sector in India is expected to be around 5.6 per cent in FY 15 owing, particularly, to the growth in the IT sector. The services sector in India comprises a wide range of activities, including trading, transportation, communication, financial, real estate and business services, and community, social and personal services
The services sector showed a lower growth of 6.8 per cent in April-June this year, against 7.2 per cent in the year-ago period, the financial year's first quarter. The growth was relatively less in trade, hotels, transport and communication. It is, however, more than the 6.4 per cent growth posted in January-March, the final quarter of the earlier financial year, 2013-14.
According to the data issued on 29th August by the Central Statistics Office, the highest growth in the services category in the June quarter was in financial services at 10.4 per cent. Lower, though, than the 12.9 per cent growth in the corresponding quarter of last year and 12.4 per cent in January-March.
About service sector
Also known as the tertiary sector, the development of a country's services sector is an indicator of its economic development. India's services sector is a vital component of its economy, as it presently accounts for around 60 per cent of its gross domestic product (GDP). It has matured considerably during the last few years and has been globally recognized for its high growth and development.
The growth in the services sector in India is expected to be around 5.6 per cent in FY 15 owing, particularly, to the growth in the IT sector. The services sector in India comprises a wide range of activities, including trading, transportation, communication, financial, real estate and business services, and community, social and personal services
No comments:
Post a Comment