Budget Exercise and INCOME TAX Notification
Troubled Galaxy Destroyed Dreams, chapter 445
Palash Biswas
http://indianholocaustmyfatherslifeandtime.blogspot.com/
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http://www.livemint.com/2010/01/28212117/Mukherjee-flexible-on-GST-nego.html
NEW DELHI: It's that time of the year when the occupants of the 81-year old North Block building on the Raisina Hills are in the huddle as they
prepare not just the annual accounts of the government, but also proposal that impact you and me.
Pranab Mukherjee's core team is burning the midnight oil as the minister gets ready to present the third Budget in the span of less than a year — interim in February, 2009, full Budget for 2009-10 in July after general elections and now the Budget for 2010-11. This Budget comes as the world begins its journey on the road to recovery after being hit by worst recession since the Great Depression.
Finance minister - The captain of team Budget — is not new to the game, this being his fifth stint as the team leader. But, this time, veteran Pranab Mukherjee, the man having his pulse on political-economy of the country, has a team that has many a new comers, who will have their first brush with general Budget making.
The overall tone of the Budget will be set by not just economic compulsions of withdrawing the stimulus, but also the political compulsions set out by the party leader Sonia Gandhi.
Chief economic advisor Kaushik Basu — The Cornell university professor has done extensive work in game theory, but this is his first brush with the government. The Stephanian, who is also known for his work in the area of developmental economics, has the right credentials to steer the country's policy towards the UPA government's goal of "inclusive growth". Prime Minister Manmohan Singh's choice for the post, the bhadra Bengali, Mr Basu has struck a good rapport with Mr Mukherjee. His inputs, at a time when the FM undertakes the tightrope walk between return to fiscal consolidation and keeping the economy running, will be invaluable. His policy prescription will be evident in the Economic Survey that will be tabled in parliament a day before the Budget.
Finance secretary Ashok Chawla — An Einstein look alike 1973-batch IAS officer from Gujarat cadre, is an old hand at the North Block. Soft spoken Mr Chawla steered the measures taken to insulate the country's economy from the unforeseen global financial crisis. He will have to play a key role in striking a balance between winding down those measures and fiscal consolidation. Known for his pro-reform bias, Mr Chawla will be FM's man in designing some of the key policy measures in the areas of taxation, financial sector and expenditure management in this Budget.
Revenue secretary Sunil Mitra: A 1975 batch IAS officer from the West Bengal cadre, is known to be a close confidant of the FM. Mr Mitra, who played the lead in framing the disinvestment policy of the UPA-II, takes the hot seat in the revenue department barely three-and-half weeks before the Budget. Though a newcomer to the ministry, Mr Mitra's dexterity at handling complicated issues will come handy as he helps FM in finding new revenue sources to fund expenses on crucial social sector schemes while keeping an eye on the fiscal deficit. Mr Mitra is known to be a tough bureaucrat who established his credentials taking tough decisions while handling West Bengal's power sector or disinvestment of state PSUs. He is expected to carry forward FM's 'go by the consensus' policy as he spearheads reforms in both the direct and indirect tax structure in the country.
Expenditure secretary Sushma Nath: A 1974 batch IAS officer from Madhya Pradesh cadre, literally controls the purse strings. And, she does it with a natural flair. A known number cruncher, she has spearheaded the government's austerity measures, attempting to bring back the economy back into shape. Ms Nath, who had played a key role in the sixth Pay Commission, is an old hand in the ministry having served even as joint secretary in the same department. Mild mannered Ms Nath is known to be a tough negotiator, as she tries to keep ministries and department's expenditure under check. Her tough austerity measures may have rattled quite a few ministers, but her advice on expenditure management is bound to find reflection in this year's Budget.
Disinvestment secretary Sumit Bose — A 1976 batch IAS officer, Mr Bose also belongs to Madhya Pradesh cadre and is another new member of the team Budget, though not new to financial matters. After having served for two years at the Thirteenth Finance Commission, which recently submitted its report, Mr Bose now has a different role cut out for him as he now takes the baton from Mr Mitra. Taking charge of the disinvestment department barely three-and-half weeks before the Budget, Mr Bose will be responsible for fulfilling the heavy duty agenda on disinvestment, that will reflect in FM's resource mobilisation measures in the Budget.
Financial services secretary R Gopalan — A Master's in Economics from Boston University and Public Administration and Management from Harvard University, Mr Gopalan is a newcomer to finance ministry, but his negotiating skills at the WTO are well known. The IAS officer of the 1976 batch from Tamil Nadu cadre was a key policy man as the government stitched together the package for exporters hit hard by demand slowdown in western markets after financial meltdown. His expertise in export financing at the commerce ministry will come in handy now as he provides crucial inputs for the financial sector at this juncture.
SSN Moorthy, chairman of the Central Board of Direct Taxes (CBDT): He was earlier director general investigation at Mumbai and brings a ground level perspective to the Budget. Together with CS Kahlon, member, Legislation and Computerisation, he will work out the tax proposals that will decide how much salary we take home.
V Shridhar, chairman, Central Board of Excise and Customs (CBEC): Having worked in the tax research unit of the department, Mr Shridhar knows all the nuts and bolts of indirect taxes. Assisted by a member of Budget team in CBEC, YG Parande, who has a macro perspective of indirect taxes, he will have much to contribute as government debates fiscal stimulus withdrawal, including hike in indirect tax rates.
Omita Paul, advisor to the finance minister: She coordinates the entire Budget effort, bringing all the pieces to fall in place, as the FM steps up to deliver his Budget speech.
http://economictimes.indiatimes.com/News/Economy/Policy/Nimble-hands-to-lighten-FMs-task/articleshow/5522180.cms
I have been discussing Budget 2010-2010 since December while the Income Tax Notification was Issued to kill the Masses while Stimulus has to continue. I have been also discussion Monetary and fiscal Policies, Balance of Payment and Monopolistic aggression against Aboriginal Indigenous Converted Black Untouchable India and pleading to launch Bharat Mukti ANDOLAN. I have been interacting this issue on my Blogs, write ups and Public Addresses along with Interactions. Davos Confirmed that Stimulus Continues. Economic and Home Reforms is the Drive and Corporate war is the Free Market democracy!Divestment, disinvestment and FII FDI Outsourcing and Massacre in Rural world are the Highlights of the Next Budget which would specifically readjust Revenue system and Legislation tyo feed the Money Machine with our Blood, Meat and Bones. Pranab and Chidambaram do work round the clock with India Incs Extra Constitutional Team bypassing parliament and Killing Indian Republic and its constitution.
Now I have got the Original Copy of the Incom Tax Notification. Please read it with Courage and decide whether you like to join us in resistance!
surplus in the system is just adequate to meet likely fluctuations, a senior treasury official said. A Reuters poll showed that 24 of 25 economists expect a 50 basis-point increase in the cash reserve ratio (CRR), or the proportion of deposits banks must keep with the RBI, to 5.5 percent.
However, as a CRR hike is a medium-term tool, policymakers must be sure that the surplus liquidity will sustain in the medium to long-term before hiking the ratio, said Mohan Shenoi, head of treasury at Kotak Mahindra Bank Ltd. in Mumbai.
"Only if we are 100 percent sure that, at least in the medium-term, if not in the long-term, liquidity can be sucked out through increasing CRR, then only we should do that," he told Reuters in an interview.
India's economy will grow at 7.5 per cent in the 2010-11 fiscal beginning April 1 and will increase by 8 per cent in the year after
that, a World Bank report released on Monday said.
According to Hans Timmer, director of the World Bank's Development Prospects Group, the projections are based on growth during the first quarter of fiscal 2009-10.
India's import volumes are likely to expand and could outpace the recovery in exports, Timmer added.
Quarterly advance tax outflows suck out about 400-500 billion rupees from the system for 15-20 days. Banks also need up to 300 billion rupees of cash to adjust for intra-day cash flow fluctuations in the overnight money markets, he said.
"So I think in today's circumstances, 600-800 billion rupees is the minimum required level of liquidity." Surplus cash, as seen in the central bank daily reverse repo auctions averaged about 720 billion rupees a day this month.
RBI may increase the reverse repo rate by 125 basis points and repo rate by 75 basis points by end-March 2011, Shenoi said, adding that for the next 1-2 years, he expects the reverse repo rate to be the operative rate of the central bank.
The reverse repo rate is at 3.25 percent and the repo rate stands at 4.75 percent.
To have the reverse repo rate as the operative rate, we need to keep ample liquidity in the system, Shenoi added.
TOOLS - FISCAL AND MONETARY
If liquidity is kept ample, gradually hiking the reverse repo from 3.25 to 4.5 percent may not have too much impact on the interest rates, Shenoi said.
However, the fiscal policy must be in order as using monetary policy as the first line of defence instead of as a last resort measure will have its own implications in the market, he said.
"What can have immediate impact on interest rates is fiscal policy and that depends on the budget."
Kotak Mahindra Bank expects the gross borrowing for 2010/11 fiscal to be at 4.5 trillion rupees and sees little or no room for open market purchases (OMO) by the central bank this time.
Shenoi predicts a tougher bond market in the year to come adding that only prudent fiscal measures can guide the economy to better growth prospects.
The bank sees the 1-year T-bill yield at 5.5 to 5.75 percent and the 10-year bond yield at 8.5-8.75 percent, by end-March 2011.
The Indian rupee's strength will be limited because of the inflow-outflow dynamics and India's core current account deficit, he said. The partially convertible rupee traded at 46.2350 at 3:45 p.m. (1015 GMT).
"In my view, 44.80 is the level beyond which it cannot go that easily. Whenever these flows are absent, you will find it again going down. It will be a broad range of 44.80 and 46.80.
He also said the political climate looks supportive for the government to take reformative steps.
"The next 1-2 years will be dominated not by politics, but by the compulsions of growth versus fiscal deficit and growth versus inflation."
"Nothing major is there which can upset the applecart."
in hiking interest rates to ensure growth stays on track, analysts say.
Late last week at a policy meeting, the central bank left borrowing rates at record lows to support continued expansion of Asia's third-largest economy.
But in a bid to keep a lid on resurgent inflation, the bank took a key first step towards exiting from the aggressively expansionary stance that it adopted to help India's economy ride out the global slump.
It moved to siphon off excess liquidity from the financial system by raising the cash reserve ratio -the percentage amount commercial banks must keep on deposit -by 75 basis points to 5.75 percent.
"The central bank has embarked on a handle-with-care monetary exit," said Rajeev Malik, economist at Australia's Macquarie Securities.
"Inflation has become more important, but the Reserve Bank of India has not taken its eyes off growth dynamics."
Analysts say India's central bank is trying to achieve a delicate balance of curbing inflation -- which has accelerated in the past few months to 7.31 percent -while not choking growth.
Even though central bank governor Duvvuri Subbarao forecast strong economic expansion in his policy statement, he said he did not want to remove monetary stimulus too fast because the recovery is yet fully to take hold.
And it is not only Indian policymakers who are performing such a juggling act as they wait for the economy to show clear signs of healing, the bank said.
Worldwide there is "uncertainty about the pace and shape of global recovery" and whether it "will unravel" if stimulus is withdrawn prematurely, its report noted.
India's economy expanded by 7.9 percent in the fiscal second quarter with car and mobile phone sales booming and the share market on a roll.
But growth has been driven mainly by government stimulus, tax breaks and cheap interest rates that have provided vital juice for the economy during the worst global financial crisis since the 1930s.
Also, while India's cost-of-living has risen steeply recently, the central bank says interest rate hikes cannot cure the problem in this instance.
Food inflation, driven by crop shortages, is running at 17.4 percent and accounts for 80 percent of overall inflation, economists say.
The weakest monsoon in nearly four decades has hit agricultural output but the central bank expects food costs to decline as new winter crops are harvested.
After March, "inflation is likely to drop, and probably quite sharply," said HSBC economist Robert Prior-Wandesforde.
However, analysts predict that as food inflation comes down, non-food inflation will begin emerging as a bigger problem as global commodity prices rise and demand improves on the back of a recovering economy.
They expect that to prompt the central bank to slowly raise benchmark interest rates with the first hikes expected around April.
After half a dozen rate cuts since October 2008, the repo -the rate at which the bank lends to commercial banks stands at 4.75 percent, while the reverse repo, the rate at which it borrows from banks, is 3.25 percent.
"We're seeing the beginning of monetary tightening" in India, said Vaibhav Agrawal, research vice-president at Angel Broking.
"But the rate hike process will be gradual over a period of two years and will be unlikely to stifle demand," he added.
Budget, official sources said.
The government had last year cut down service tax rate from 12 to 10 per cent as part fiscal stimulus measures to help the economy tide over the then slowdown.
Official sources said service tax rates could be raised to the original level of 12 per cent as the booming sector is something the revenue department banks upon but the 2 per cent duty cut has brought a dip in the service tax revenues.
Together with cut in service tax and excise duty reductions, Plan expenditure was also stepped up, leading to widening of fiscal deficit as the total stimulus amounted to Rs 1,86,000 crore.
The fiscal deficit, which was projected to be 2.5 per cent of GDP at the beginning of 2008-09, crossed six per cent by the end of the fiscal. It is projected to further rise to 6.8 per cent this fiscal.
"With rising fiscal deficit to manage and the economy showing some signs of recovery, the government may withdraw the fiscal stimulus, though not completely. Service tax ambit could be widened and the rates may see upswing to the pre-stimulus period," said Ernst and Young Partner and Indirect Tax Leader Vivek Mishra.
Expressing concern over the rising food prices, the Reserve Bank today said its move to ask banks to keep more cash with it was a
carefully weighed decision to strike a balance between growth and inflation as it will not put an immediate pressure on interest rates.
"Inflation has been driven mainly by rising food prices on the back of shortage of supplies. The wholesale inflation stands at 2.1 per cent if food items are excluded," RBI Governor D Subbarao said at a teleconference.
He added that while surging food prices are a concern, overall inflation is expected to moderate from July.
The Governor said banks have told him that its decision to raise the cash reserve ratio which is the proportion of deposits that banks have to park with the central bank, by 0.75 percentage point will not put an immediate pressure on interest rates as there is abundant liquidity in the system.
The RBI move will suck out Rs 36,000 crore from the system while banks have deposits of Rs 48 lakh crore as on January 15.
Food inflation stood at 17.40 per cent for the week ended January 16 while overall inflation was 7.31 per cent in December.
Subbarao said the RBI considered raising the short-term lending and borrowing (repo and reverse repo) rates but decided in favour of raising the CRR. "The hike was a carefully weighed trade-off between growth and inflation," he said.
Govt likely to continue with stable eco policies in budget
The Government is likely to continue with its existing policies to ensure economic stability in the forthcoming Union Budget, a top
banker said.
"The Government has always believed in stable policies. I am sure that this will continue in the coming budget," ICICI Bank's Non-Executive Chairman, K V Kamath, told reporters on the sidelines of a function organised by the Institute of Chartered Accountants of India here.
Commenting on the impact of the Cash Reserve Ratio (CRR) hike announced by the Reserve Bank last week, Kamath said the hike in CRR would not have a serious impact on availability of credit or on its pricing.
RBI hiked its cash reserve ratio by 0.75 per cent to 5.75 per cent in its monetary policy review last Friday. The move will be implemented in two stages. The first 0.50 per cent hike will come into effect on February 13 while the balance 0.25 per cent hike will be effective February 27.
The apex bank expects the move to result in a mop-up of Rs 36,000-crore from the system.
"With inflation stepping up, there was a need to show preparedness. Liquidity is so deep, it should not have any serious impact on the availability or pricing of credit," Kamath said.
Why Big B mum on Shah Rukh, Shiv Sena issue?
Bollywood megastar Amitabh Bachchan says he has chosen to remain tight-lipped over Indian Premier League (IPL) issue because he fears
his statement could be misinterpreted.
"They (the media) ask all the same questions on the film ('Rann') and the media and the angst among them. And then the real reason they are their - 'What sir are your takes on this IPL and Pakistan and Balasaheb and Shah Rukh events?'," Amitabh posted on his blog on Sunday from his Pratkeesha residence in Mumbai.
Shiv Sena activists demonstrated in front of superstar Shah Rukh's house in Bandra here Sunday to protest his comments favouring inclusion of Pakistani players in the Indian Premier League (IPL). They dubbed him a traitor and have demanded that he apologise.
"These are sensitive issues and I must remain out of it. Who and which channel shall distort, amend, cut paste, slow motion, back ground music my comment, one does not know. And also one does not know what stance the channel shall take on it. So, it is best to not comment at all," he added.
Shah Rukh is the co-owner of Kolkata Knight Riders IPL team.
BJP backs RSS stand on north Indians
Amid a war of words with the Shiv Sena over the issue of migrants in Mumbai, the BJP and RSS on Monday said there should be no
discrimination against North Indians in Maharashtra and no party should create a divide for the sake of political gain.
"What the RSS has said (that North Indians should be protected in Maharashtra) is absolutely correct. All over India, every countryman has rights and all political parties should respect this basic feeling among all Indians," BJP vice-president Shanta Kumar said.
He said political parties should keep in mind that "just for politics, we should not divide the country".
RSS yesterday said it would protect North Indians living in Maharashtra, a contention that brought the chasm between BJP and Shiv Sena, its ally in the state, out in the open.
Shiv Sena and Raj Thackeray-led MNS have repeatedly targeted North Indians working in Maharashtra. Another senior RSS leader Sheshadari Chari today echoed the views of organsation's Chief Mohan Bhagwat on the issue.
"Every Indian should be protected everywhere, not only on Indian soil but also outside it. If Indians are attacked in Australia, even there they require to be protected. So it is not a question of North Indians being protected in Maharashtra and South Indians being protected in Delhi," he said.
Sheshadri insisted that RSS was opposed to this idea of "segregating the people on basis of community, caste, religion or language" as it amounts to dividing them.
Responding to Bhagwat's remarks, Sena leader Manohar Joshi had yesterday said, "The time has come to remind RSS that Mumbai belongs to Marathi people only."
Secret Swiss bank data comes from HSBC bank: Report
BERLIN: A disk said to contain the names of some 1,300 Germans evading the taxman by parking funds in Switzerland comes from British bank HSBC,
the Financial Times Deutschland reported on Monday.
The paper said the secret informant was 37-year-old Herve Falciani, an IT specialist from HSBC private bank in Geneva, who last year handed over similar data to the French authorities.
Falciani reportedly wants 2.5 million euros (3.5 million dollars) for the information, which could in turn net the German authorities some 100 million euros, the paper said, without naming its sources.
He was also at the heart of a similar spat between Switzerland and France resolved last week. Falciani had offered data concerning some 3,000 French taxpayers to the authorities.
But Switzerland, which guards its banking privacy laws jealously, demanded the return of the data, to which Paris eventually agreed.
The affair has prompted somewhat of a moral dilemma in Germany, with several politicians saying Berlin should not pay for stolen data. Others argued that the tax revenue that could be recouped was worth the price.
Nevertheless, there has been a precedent: in 2008, the German secret service paid five million euros for data stolen from Lichtenstein allowing authorities to pursue around 1,000 German tax evaders.
No fuel price hike till committee submits report: Deora
Petroleum Minister Murli Deora on Monday indicated that transport fuel prices will not increase till the Kirat Parikh committee
submits its report.
The Kirat Parikh committee was constituted for making recommendations to the government on carrying out reforms in the oil sector, including the pricing mechanism for transport fuels. The committee's report is long overdue.
"We want to see that the prices are not increased right now as it will have a cascading effect on other sectors," Deora told reporters here.
The minister also added that he will be meeting finance minister Pranab Mukherjee Tuesday regarding compensation for losses suffered by the oil marketing companies (OMC) -- Indian Oil, Bharat Petroleum and Hindustan Petroleum -- who have been selling fuel at a subsidised rate.
The total losses suffered by oil marketing companies this fiscal is around Rs.43,000 crore.
The finance ministry has so far only agreed to release Rs.12,000 crore in cash while the upstream energy companies Oil and Natural Gas Corp and OIL have also pitched in with some funds.
The petroleum ministry is trying to persuade the finance ministry to absorb the entire losses.
Petroleum Secretary S. Sundareshan, who assumed charge Sunday, said one of his priorities would be that OMC's do not suffer on account of the under-recoveries.
At current global prices, the three public sector companies are losing Rs.299 per cooking gas cylinder, Rs.17.23 per litre of kerosene, Rs.3.06 per litre of petrol and Rs.1.56 per litre of diesel.
India to beat China to become fastest growing economy: Montek
DAVOS: Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday expressed confidence that in the years to come India could emerge as
the fastest growing economy in the world, beating China as the nation has yet to achieve its full growth potential.
"We have accelerated ... not reached the full peak of our growth potential which could easily be 9 to 10 per cent. So, if India accelerates to say 10 per cent and China begins to decelerates you could have a situation where India grows faster than China," he told PTI at the conclusion of the five-day World Economic Forum meeting here.
India has been growing by over nine per cent till the global economic crisis hit the economy and pulled down the country's growth rate to 6.7 per cent during 2008-09.
During the current fiscal, the economy is expected to expand by over 7.75 per cent, as indicated by Finance Minister Pranab Mukherjee in his Mid-Year Review of the Economy which was tabled in Parliament in December.
China clocked a growth of 10.7 per cent during the quarter ending December retaining its position as the fastest growing economy during 2009. India grew by 7.9 per cent during July-September 2009 quarter.
Ahluwalia, who participated in several sessions during the 40th annual meeting of WEF at Swiss Alpine resort, also emphasised that the impression about India has changed among the global investor community.
NEW DELHI: Rising prosperity will increasingly put pressure on food supply in India and the country urgently needs to boost farm productivity,
Prime Minister Manmohan Singh said on Monday.
After last year's failed monsoon rains, food prices have jumped in India, one of the world's top consumers of sugar, wheat, edible oils, rice and lentils, triggering protests in poorer regions and putting pressure on authorities to tighten monetary supply.
Indian demand has helped New York raw sugar futures surge to the highest in 29 years.
PM told a meeting of top bureaucrats from states that the country needed to increase farm productivity as food supply was an area of concern.
"Many felt that we have been able to control prices. But we have learnt that our growing population and higher levels of living necessitate augmentation of our food supplies," he said.
Last year, sugar prices in India doubled in step with global prices and forced India to import large quantities to ensure steady supplies.
"We must also recognise that in a globalised world, it will never be possible to insulate ourselves from the pulls and pressures of international demand and supply," Singh said.
He urged state governments to take steps to boost food output and tackle shortages of essential commodities.
India's consumption of items such as sugar, wheat, vegetable oils and lentils has increased steadily as the world's third-largest economy expanded rapidly.
Analysts say the government's welfare schemes and its focus on rural development has further increased demand in villages.
Reserve Bank of India last week lifted its wholesale price index inflation forecast for the end of the fiscal year in March to 8.5 percent from 6.5 percent and upgraded its economic growth forecast for 2009/10 to 7.5 percent from 6 percent, predicting a similar rate of growth the following year.
It said it expected inflation to moderate from July, assuming a normal monsoon and steady oil prices.
Food security, productivity remain major concerns in India: PM
NEW DELHI: The sense of comfort over India's food security is somewhat misplaced and both the availability of produce and controlling prices
remain challenges needing focussed attention on farm productivity, Prime Minister Manmohan Singh has said.
"Our experience in the past two years has brought to the fore the importance of food security and the need for containing prices," the prime minister told the first annual conference of chief secretaries here Monday.
"For some time past, there was a false sense of security that availability of food has ceased to be a concern. Similarly, many felt that we have been able to control prices," he said in a rather frank assessment of the ground reality.
He, accordingly, urged the state governments, too, to focus their energies on farm productivity and said there was great scope for improving the yields of major crops and hoped to see greater efforts in achieving this.
"Our agricultural productivity still ranks far below the best in the world."
Drawing comfort from the manner in which India handled the challenges posed by the global slowdown in a much better fashion than many other economies, the prime minister stressed that inclusive growth remained the government's centre-piece of development.
"Fast economic growth has little meaning if it does not lead to the well being of the poor and the disadvantaged, of our farmers and workers, of our children, students and women. The benefits of the development process have to percolate to every part of our country."
He said it was for the bureaucracy to ensure that the numerous welfare programmes of the federal and state governments are implemented in the spirit in which they have been conceived, without roadblocks and leakages, through decentralised governance.
"All this constitutes a huge task that requires dedication, commitment and persistence. I would like to add here that the central government does recognize that there is always room for improvement in these schemes and programmes."
The prime minister also expressed concern over poor infrastructure in the country and said states that have lagged behind must go that extra mile to remove all the bottlenecks.
"Shortages of electricity, poor roads, over-crowded ports, delayed flights, all retard our economic efficiency and damage our international image. States that have relatively better infrastructure attract investment while the others lag behind," he said.
"This is a lesson which all States have to imbibe."
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www.dnaindia.com/.../report_united-nations-2010-2011-budget-pushes-past-5-billion_1327278 - Cached -Indian Union Budget 2010-2011 – Getting released on 26th Feb ...
- 6:30am12 Jan 2010 ... One of the most expected budgets 2010-2011 is expected to release on Feb 26th because the usual budget release date Feb 28th falls on Sunday ...
www.moneymint.in/.../indian-union-budget-2010-2011-getting-released-on-26th-feb-download-live-webcast-budget-documents - Cached -Union Budget 2010-11, India Budget 2010 - www.indiabudget.nic.in ...
Tagged: union budget live, union budget 10-11, union budget highlights, union budget speech, budget 2010-2011 india, budgetlive.nic.in, live budget speech ...
www.oyindia.com/?...budget-2010-india-budget...indiabudget... - 6 hours ago - Cached -Global Semester Pilot (2010-2011) Projected Budget ChinaIndia
18 Nov 2009 ... Global Semester Pilot (2010-2011) Projected Budget China/India FTE (Annual) Tuition Rate Program Fee 30.00 19503.00 2500.00 Projected FY 11 ...
www.docstoc.com/.../Global-Semester-Pilot-(2010-2011)-Projected-Budget-ChinaIndia - Cached -ReliefWeb » Document » India: Plan 2010-2011 (MAAIN001)
20 Oct 2009 ... The International Federation India country plan 2010-2011 is in line ... 1.85 million or EUR 1.25 million) and the budget for 2011 is CHF ...
www.reliefweb.int/rw/rwb.nsf/db900sid/MYAI-7XA7SD?... - Cached -id="article_title" United Nations' 2010-2011 budget pushes past $5 ...
25 Dec 2009 ... id="article_title" United Nations' 2010-2011 budget pushes past $5 billion DNA India 2009-12-25. United Nations: The General Assembly ...
article.wn.com/.../id_article_title_United_Nations_20102011_budget_pushes_past_/ - Cached -U.N. 2010-2011 budget pushes past $5 billion | World | Reuters
24 Dec 2009 ... U.N. 2010-2011 budget pushes past $5 billion ... WORLD ECONOMIC FORUM 2010 ... U.S. policy confusion on Pakistan and India ...
in.reuters.com/article/worldNews/idINIndia-44981620091224 - Cached -
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Sensex up 240 points from the day's lowBloombergUTV - 5 hours ago Obama will deliver remarks on the US budget on Monday. He is to speak about the fiscal situation after release of his spending blueprint for the 2011 fiscal ... Small-cap, mid-cap indices outperform Sensex BloombergUTV DIARY - Turkey - to May 31, 2010Reuters - 8 hours ago ANKARA - President Abdullah Gul departs for visit to India and Bangladesh. Until Feb. 13. ISTANBUL - EurasiaRail 2010 conference on railway transport. ... Market may edge lower on weak Asian stocksBloombergUTV - 11 hours ago Obama will deliver remarks on the US budget on Monday. He is to speak about the fiscal situation after release of his spending blueprint for the 2011 fiscal ... Civic body fails to recover dues worth Rs 5 croreTimes of India - Jan 30, 2010 ... Sammelan (the all-India Marathi literary meet) to be held in the city in March this year. The municipal commissioner, in his draft budget for 2010-2011, ... India will host fantastic Commonwealth Games: KalmadiZee News - Jan 30, 2010 Is all well with the 2010 Commonwealth Games? Will the Games happen on time? Kalmadi: India will host a fantastic Commonwealth Games and surely, ... The euro zone faces tough dilemmas at its core as well as its peripheryWall Street Journal - - 5 hours ago ... global growth at a rate of 3.9% this year, with China and India leading the way at 10% and 8%, respectively, in 2010 and almost that in 2011. ... Seven days in JanuaryAsia Times Online - - 5 hours ago After all, if Gates was blindsided in Pakistan, he already knew that a US$626 billion Pentagon budget, including more than $128 billion in war-fighting ... Market see-saw may continue over the short termMoneylife Personal Finance Magazine - - Jan 29, 2010 The International Monetary Fund said that India's economy would grow at around 7.7% this year and at 7.8% in 2011. As per US reports, consumer confidence ... GST rollout to miss April deadlineEconomic Times - Jan 28, 2010 "Because of the difficulties in passing the required constitutional amendment bill in the budget session , it will not be practical to introduce GST on ... Govt won't be able to introduce GST in April '10: Sanjay Bhatia India Infoline.com RBI may not hike CRR as liquidity adequate: KotakEconomic Times - Jan 28, 2010 MUMBAI: The Reserve Bank of India (RBI) is unlikely to increase cash reserve ratio for banks at its policy review on Friday as the current surplus in the ... | |
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Report II - Draft Programme and Budget for 2010-11 and other financial questions. Type, Meeting document. Date issued, 24 April 2009 ...
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With just three months left for the Union Budget 2010-11, the Ministry of Finance has started the process of pre-Budget consultations. ...
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5 Jun 2009 ... The Union Budget of India lays down guidelines and ... As per Financial astrology, year 2010-11 is represented by figure two and three. ...
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Union Budget 2010-11 On February 26: Rail Budget On Feb 24 - 2 days ago Budget session of the present year 2010-11 will commence on February 22. General Budget is scheduled to take place on February 26 while the Railway Budget ...india-server.com - 4 related articles »
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For Budget 2010-11, all the Ministries are required to ... 31st March, 2009, are meant for inclusion in Receipts Budget 2010-11. ...
finmin.nic.in/the_ministry/.../budget/budgetcircular2010-11.pdf - Similar - Budget 2010-11: Reforms deficit stays even after two decades ...
Budget 2010-11, the 20th reform Budget, is likely to echo many of the concerns raised by Manmohan Singh in 1st reform Budget 1991-92. ...
economictimes.indiatimes.com/.../Budget-2010-11.../5496704.cms - Cached -Union Budget 2010-11 on Feb 26 this year- Finance-Economy-News-The ...
NEW DELHI: The Union Budget for 2010-11 is likely to be presented on February 26, two days ahead of the conventional date. Finance minister Pranab Mukherjee ...
economictimes.indiatimes.com/...Budget-2010-11.../5429288.cms - Cached -Union Budget 2009-10: Expectations run high! Mutual Funds ...
2 Jul 2009 ... Union Budget 2009-10: Expectations run high! Last one year has been a tumultuous one for all - the common man as well as the investor. ...
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Budget 2010-11 – The Indian citizen wish list gallery. January 13th, 2010. The most consistent tax payers in India are the salaried class as their salaries ...
www.bankbazaar.com/.../budget-2010-11-the-indian-citizen-wish-list-gallery/ - Cached -Railway Budget 2010-11: Mamata Banerjee To Discuss Rail PPPs On Feb 6
Union railway minister Mamata Banerjee has called for a meeting on February 6 to discuss rail PPPs to be presented in coming budget.
www.india-server.com/.../railway-budget-2010-11-mamata-banerjee-20246.html - Cached -MACHINIST - Focus of Budget 2010-11 should be to Bring Growth Back ...
7 Jan 2010 ... MACHINIST -, Focus of Budget 2010-11 should be to Bring Growth Back to 9%: Venu Sriniasan.
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World Gold council sees greater role for gold in tax saving instrumentsIndia Infoline.com - 4 hours ago ... in India the yellow metal is still being treated as a commodity. Furthermore, if gold is to be treated as an investment option, its role for income tax ... High prices and hoarding will continue in IndiaOneindia - 5 hours ago That also leads to evasion of other taxes on such goods-be it sales tax, value-added tax or income tax. This can be checked if there is a will on the part ... Senior Citizens Savings Scheme offers regular periodic incomeEconomic Times - 15 hours ago However, with the recent amendment an investment up to Rs 1,00000 in this scheme in a year is exempted under Section 80C of the Income Tax Act. So, ... New tax code to help Reliance Industries, few othersDaily News & Analysis - - 17 hours ago Instead of taxing income, or profits — which is what any income tax regulation ought to do — it seeks to tax gross fixed assets (GFA). ... Vodafone: India Body Has No Jurisdiction to Tax Hutch DealWall Street Journal - - Jan 29, 2010 MUMBAI -- Vodafone Group PLC reiterated Friday that India's income tax department does not have ... Vodafone replies to IT Dept's notice on $11.2bn Hutch deal Moneycontrol.com Vodafone says files response to India tax claim Reuters India Honda to recall over 8000 City unitsChandigarh Tribune - Jan 30, 2010 As I am a retired government officer should I take permission from Income-Tax department to sell and send money to my daughter who is unmarried? ... PTC India posts decline of Rs 16 cr in PATEconomic Times - 4 hours ago 1 Feb 2010, 1558 hrs IST, PTI NEW DELHI: PTC India reported a decline in profit after tax at Rs 16 crore for the quarter ended December 31, 2009, ... PTC expects 6K mw power to be commissioned by FY12-13 Moneycontrol.com Quality tax audit scheme: a move to finetune tax assessmentFinancial Express - 20 hours ago : The Central Board of Direct Taxes recently framed a scheme for ensuring quality tax assessments by its officers across India. In the preface to the scheme ... The STAR Amalgamation: No Indian tax Liability for Transfer of SharesVC Circle - - 6 hours ago The AAR rejected the plea of the income tax department and refused to deny the benefit of capital gain tax exemption on the ground that the amalgamation is ... Definition of income of a trust has a different connotationFinancial Express - - 21 hours ago The long-term capital gains arising from sale of shares on a recognised stock exchange in India are free from tax. We presume you have sold the shares in an ... | |
Mukherjee flexible on GST negotiations
Livemint - - Jan 28, 2010
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22 briefed Union Finance Minister Pranab Mukherjee on its recommendations on sharing tax receipts between the Center and the states, which are likely to ...
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FM seeks help for simple, clear tax regime
Hindustan Times - Jan 28, 2010
Finance Minister Pranab Mukherjee has sought assistance from the legal fraternity in simplifying the country's direct and indirect tax norms. ...
GST rollout to miss April deadline
Economic Times - Jan 28, 2010
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GST will not be introduced from April 1, 2010
The Hindu - Jan 28, 2010
Speaking to the media after a meeting with Union Finance Minister Pranab Mukherjee here on Thursday, Empowered Committee of State Finance Ministers chairman ...
New date for GST rollout to be known in April
Business Standard - Jan 28, 2010
Finance Minister Pranab Mukherjee and state finance ministers will meet in April to decide a new date for the GST rollout. For the first time, Asim Dasgupta ...
Taxes, selloff to be flavour of this Budget
Economic Times - Jan 28, 2010
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GST not to be implemented by April 1
Moneycontrol.com - Jan 28, 2010
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... of Parliament. finance minister Pranab Mukherjee [ Images ] and state finance ministers will meet in April to decide a new date for the GST rollout. ...
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Nimble hands to lighten FM's task
NEW DELHI: It's that time of the year when the occupants of the 81-year old North Block building on the Raisina Hills are in the huddle as they
Pranab Mukherjee's core team is burning the midnight oil as the minister gets ready to present the third Budget in the span of less than a year — interim in February, 2009, full Budget for 2009-10 in July after general elections and now the Budget for 2010-11. This Budget comes as the world begins its journey on the road to recovery after being hit by worst recession since the Great Depression.
Finance minister - The captain of team Budget — is not new to the game, this being his fifth stint as the team leader. But, this time, veteran Pranab Mukherjee, the man having his pulse on political-economy of the country, has a team that has many a new comers, who will have their first brush with general Budget making.
The overall tone of the Budget will be set by not just economic compulsions of withdrawing the stimulus, but also the political compulsions set out by the party leader Sonia Gandhi.
Chief economic advisor Kaushik Basu — The Cornell university professor has done extensive work in game theory, but this is his first brush with the government. The Stephanian, who is also known for his work in the area of developmental economics, has the right credentials to steer the country's policy towards the UPA government's goal of "inclusive growth". Prime Minister Manmohan Singh's choice for the post, the bhadra Bengali, Mr Basu has struck a good rapport with Mr Mukherjee. His inputs, at a time when the FM undertakes the tightrope walk between return to fiscal consolidation and keeping the economy running, will be invaluable. His policy prescription will be evident in the Economic Survey that will be tabled in parliament a day before the Budget.
Finance secretary Ashok Chawla — An Einstein look alike 1973-batch IAS officer from Gujarat cadre, is an old hand at the North Block. Soft spoken Mr Chawla steered the measures taken to insulate the country's economy from the unforeseen global financial crisis. He will have to play a key role in striking a balance between winding down those measures and fiscal consolidation. Known for his pro-reform bias, Mr Chawla will be FM's man in designing some of the key policy measures in the areas of taxation, financial sector and expenditure management in this Budget.
Revenue secretary Sunil Mitra: A 1975 batch IAS officer from the West Bengal cadre, is known to be a close confidant of the FM. Mr Mitra, who played the lead in framing the disinvestment policy of the UPA-II, takes the hot seat in the revenue department barely three-and-half weeks before the Budget. Though a newcomer to the ministry, Mr Mitra's dexterity at handling complicated issues will come handy as he helps FM in finding new revenue sources to fund expenses on crucial social sector schemes while keeping an eye on the fiscal deficit. Mr Mitra is known to be a tough bureaucrat who established his credentials taking tough decisions while handling West Bengal's power sector or disinvestment of state PSUs. He is expected to carry forward FM's 'go by the consensus' policy as he spearheads reforms in both the direct and indirect tax structure in the country.
Expenditure secretary Sushma Nath: A 1974 batch IAS officer from Madhya Pradesh cadre, literally controls the purse strings. And, she does it with a natural flair. A known number cruncher, she has spearheaded the government's austerity measures, attempting to bring back the economy back into shape. Ms Nath, who had played a key role in the sixth Pay Commission, is an old hand in the ministry having served even as joint secretary in the same department. Mild mannered Ms Nath is known to be a tough negotiator, as she tries to keep ministries and department's expenditure under check. Her tough austerity measures may have rattled quite a few ministers, but her advice on expenditure management is bound to find reflection in this year's Budget.
Disinvestment secretary Sumit Bose — A 1976 batch IAS officer, Mr Bose also belongs to Madhya Pradesh cadre and is another new member of the team Budget, though not new to financial matters. After having served for two years at the Thirteenth Finance Commission, which recently submitted its report, Mr Bose now has a different role cut out for him as he now takes the baton from Mr Mitra. Taking charge of the disinvestment department barely three-and-half weeks before the Budget, Mr Bose will be responsible for fulfilling the heavy duty agenda on disinvestment, that will reflect in FM's resource mobilisation measures in the Budget.
Financial services secretary R Gopalan — A Master's in Economics from Boston University and Public Administration and Management from Harvard University, Mr Gopalan is a newcomer to finance ministry, but his negotiating skills at the WTO are well known. The IAS officer of the 1976 batch from Tamil Nadu cadre was a key policy man as the government stitched together the package for exporters hit hard by demand slowdown in western markets after financial meltdown. His expertise in export financing at the commerce ministry will come in handy now as he provides crucial inputs for the financial sector at this juncture.
SSN Moorthy, chairman of the Central Board of Direct Taxes (CBDT): He was earlier director general investigation at Mumbai and brings a ground level perspective to the Budget. Together with CS Kahlon, member, Legislation and Computerisation, he will work out the tax proposals that will decide how much salary we take home.
V Shridhar, chairman, Central Board of Excise and Customs (CBEC): Having worked in the tax research unit of the department, Mr Shridhar knows all the nuts and bolts of indirect taxes. Assisted by a member of Budget team in CBEC, YG Parande, who has a macro perspective of indirect taxes, he will have much to contribute as government debates fiscal stimulus withdrawal, including hike in indirect tax rates.
Omita Paul, advisor to the finance minister: She coordinates the entire Budget effort, bringing all the pieces to fall in place, as the FM steps up to deliver his Budget speech.
http://economictimes.indiatimes.com/News/Economy/Policy/Nimble-hands-to-lighten-FMs-task/articleshow/5522180.cms
I have been discussing Budget 2010-2010 since December while the Income Tax Notification was Issued to kill the Masses while Stimulus has to continue. I have been also discussion Monetary and fiscal Policies, Balance of Payment and Monopolistic aggression against Aboriginal Indigenous Converted Black Untouchable India and pleading to launch Bharat Mukti ANDOLAN. I have been interacting this issue on my Blogs, write ups and Public Addresses along with Interactions. Davos Confirmed that Stimulus Continues. Economic and Home Reforms is the Drive and Corporate war is the Free Market democracy!Divestment, disinvestment and FII FDI Outsourcing and Massacre in Rural world are the Highlights of the Next Budget which would specifically readjust Revenue system and Legislation tyo feed the Money Machine with our Blood, Meat and Bones. Pranab and Chidambaram do work round the clock with India Incs Extra Constitutional Team bypassing parliament and Killing Indian Republic and its constitution.
Now I have got the Original Copy of the Incom Tax Notification. Please read it with Courage and decide whether you like to join us in resistance!
The market may edge lower, snapping last two days' gains on weak Asian stocks. Fresh worries over public finances of Greece, Portugal and other smaller euro zone countries weighed on US stocks on Friday 29 January 2010. Shares of auto, cement, steel firms will be in focus as the companies release monthly sales volume for January 2010.
An interest rate hike would have indicated a greater degree of confidence in the recovery but the possibility of a mid-cycle action exists in case of a provocative situation, a deputy governor at the Reserve Bank of India (RBI) Subir Gokarn said on Friday 29 January 2010. The Reserve Bank of India (RBI) surprised markets by raising banks' cash reserve requirements by more than expected on Friday 29 January 2010 and warned of mounting inflation, setting the stage for increasing interest rates in the coming months. The RBI kept short-term interest rates steady at its quarterly policy review but signalled hawkish intent.
The RBI said the CRR would be increased by 50 basis points from 13 February 2010 and a further 25 basis points to 5.75 % from 27 February 2010. It held its lending rate, or the repo rate, unchanged at 4.75% and its reverse repo rate, at which it absorbs surplus cash from banks, unchanged at 3.25 %.
The Reserve Bank of India (RBI) is unlikely to increase cash reserve ratio for banks at its policy review on Friday as the current
| |
However, as a CRR hike is a medium-term tool, policymakers must be sure that the surplus liquidity will sustain in the medium to long-term before hiking the ratio, said Mohan Shenoi, head of treasury at Kotak Mahindra Bank Ltd. in Mumbai.
"Only if we are 100 percent sure that, at least in the medium-term, if not in the long-term, liquidity can be sucked out through increasing CRR, then only we should do that," he told Reuters in an interview.
India's economy will grow at 7.5 per cent in the 2010-11 fiscal beginning April 1 and will increase by 8 per cent in the year after
| |
According to Hans Timmer, director of the World Bank's Development Prospects Group, the projections are based on growth during the first quarter of fiscal 2009-10.
India's import volumes are likely to expand and could outpace the recovery in exports, Timmer added.
Quarterly advance tax outflows suck out about 400-500 billion rupees from the system for 15-20 days. Banks also need up to 300 billion rupees of cash to adjust for intra-day cash flow fluctuations in the overnight money markets, he said.
"So I think in today's circumstances, 600-800 billion rupees is the minimum required level of liquidity." Surplus cash, as seen in the central bank daily reverse repo auctions averaged about 720 billion rupees a day this month.
RBI may increase the reverse repo rate by 125 basis points and repo rate by 75 basis points by end-March 2011, Shenoi said, adding that for the next 1-2 years, he expects the reverse repo rate to be the operative rate of the central bank.
The reverse repo rate is at 3.25 percent and the repo rate stands at 4.75 percent.
To have the reverse repo rate as the operative rate, we need to keep ample liquidity in the system, Shenoi added.
TOOLS - FISCAL AND MONETARY
If liquidity is kept ample, gradually hiking the reverse repo from 3.25 to 4.5 percent may not have too much impact on the interest rates, Shenoi said.
However, the fiscal policy must be in order as using monetary policy as the first line of defence instead of as a last resort measure will have its own implications in the market, he said.
"What can have immediate impact on interest rates is fiscal policy and that depends on the budget."
Kotak Mahindra Bank expects the gross borrowing for 2010/11 fiscal to be at 4.5 trillion rupees and sees little or no room for open market purchases (OMO) by the central bank this time.
Shenoi predicts a tougher bond market in the year to come adding that only prudent fiscal measures can guide the economy to better growth prospects.
The bank sees the 1-year T-bill yield at 5.5 to 5.75 percent and the 10-year bond yield at 8.5-8.75 percent, by end-March 2011.
The Indian rupee's strength will be limited because of the inflow-outflow dynamics and India's core current account deficit, he said. The partially convertible rupee traded at 46.2350 at 3:45 p.m. (1015 GMT).
"In my view, 44.80 is the level beyond which it cannot go that easily. Whenever these flows are absent, you will find it again going down. It will be a broad range of 44.80 and 46.80.
He also said the political climate looks supportive for the government to take reformative steps.
"The next 1-2 years will be dominated not by politics, but by the compulsions of growth versus fiscal deficit and growth versus inflation."
"Nothing major is there which can upset the applecart."
The cash reserve ratio was cut by 4 percentage points between October 2008 and January 2009 as the central bank moved to support the economy during the global financial crisis also slashing interest rates to their lowest levels since 2000.
The consumer price index rose 14.97% in December 2009 from a year earlier, higher than November's annual rise of 13.51 %, government data showed on Friday. The annual wholesale inflation rose to 7.31% in December 2009, compared with 4.78 % rise in November and 6.15% a year ago.
The RBI said that reversing its accommodative monetary policy would be ineffective unless the government cuts borrowing, on track to hit a record Rs 4,50,000 crore ($97 billion) this fiscal year, putting pressure on the government to rein in spending when it releases its budget on 26 February 2010. India is joining a trend in other major emerging economies towards gradual tightening of loose monetary policies.
This month, China started to tighten policy by raising banks' reserve requirements, clamping down on loan growth and accepting higher yields at bill auctions. Last week, Brazil -- another member of the BRIC quartet of emerging powers that also includes Russia -- held rates steady but left the door open for a possible rate hike.
The Reserve Bank of India lifted its wholesale price index inflation forecast for the end of the fiscal year in March to 8.5% from 6.5% and upgraded its economic growth forecast for the current fiscal year to 7.5% from 6%, predicting a similar rate of growth the following year. It said it expected inflation to moderate from July 2010, assuming a normal monsoon and steady oil prices, but the new forecasts convinced many analysts an interest rate rise was imminent.
Meanwhile, the capital market regulator has reportedly shut its doors on several foreign funds amid concerns that they may turn out to be vehicles for round-tripping of money by local residents. The Securities and Exchange board of India (Sebi) is taking a closer look at the structure of new investors, as well as those seeking renewals, following misreporting of transactions by blue-chip foreign institutional investors (FIIs) like Barclays and Societe Generale (SocGen) report said.
Asian stocks fell on Monday after Toshiba Corp. cut its revenue forecast and Honda Motor Co. recalled cars. The key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore, Taiwan and Indonesia fell by between 0.33% to 1.53%.
China's manufacturing expanded at the second-fastest pace since 2008 in January 2010 as export demand improved, helping to cement the nation's recovery. The Purchasing Managers' Index fell to a seasonally adjusted 55.8 from 56.6 in December 2009.
US stocks slid on Friday, sending the benchmark S&P 500 down more than 1% during the last half-hour of the session as investors pared back exposure to riskier assets amid worries about fiscal turmoil in Europe. The Dow was down 53.13 points, or 0.5%, to 10,067.33. The S&P 500 index was down 10.66 points, or 1%, to 1,073.87, the Nasdaq Composite Index shed 31.65 points, or 1.5%, to 2,147.35.
President Barack Obama on Friday proposed $33 billion in tax credits to coax small businesses into hiring workers as he underscored his commitment to pushing job creation to the top of his agenda.
Obama will deliver remarks on the US budget on Monday. He is to speak about the fiscal situation after release of his spending blueprint for the 2011 fiscal year.
Tens of millions more people in Africa and elsewhere will be driven into poverty this year even though the world is recovering from the global financial crisis, World Bank president Robert Zoellick said on Sunday.
Closer home, the key benchmark indices staged a strong intraday rebound albeit in choppy trade, extending gains for the straight second day on Friday, 29 January 2010, as European stocks and US index futures rose. The BSE 30-share Sensex rose 51.09 points or 0.31% to 16,357.96 on that day.
As per provisional figures on NSE, foreign funds sold shares worth Rs 996.09 crore and domestic funds bought shares worth Rs 1011.02 crore on Friday.
Govt shifts monetary gears as economy rebounds
Government's central bank has shifted gear from the ultra-loose monetary policy used to help the economy rebound but it will go slow
Late last week at a policy meeting, the central bank left borrowing rates at record lows to support continued expansion of Asia's third-largest economy.
But in a bid to keep a lid on resurgent inflation, the bank took a key first step towards exiting from the aggressively expansionary stance that it adopted to help India's economy ride out the global slump.
It moved to siphon off excess liquidity from the financial system by raising the cash reserve ratio -the percentage amount commercial banks must keep on deposit -by 75 basis points to 5.75 percent.
"The central bank has embarked on a handle-with-care monetary exit," said Rajeev Malik, economist at Australia's Macquarie Securities.
"Inflation has become more important, but the Reserve Bank of India has not taken its eyes off growth dynamics."
Analysts say India's central bank is trying to achieve a delicate balance of curbing inflation -- which has accelerated in the past few months to 7.31 percent -while not choking growth.
Even though central bank governor Duvvuri Subbarao forecast strong economic expansion in his policy statement, he said he did not want to remove monetary stimulus too fast because the recovery is yet fully to take hold.
And it is not only Indian policymakers who are performing such a juggling act as they wait for the economy to show clear signs of healing, the bank said.
Worldwide there is "uncertainty about the pace and shape of global recovery" and whether it "will unravel" if stimulus is withdrawn prematurely, its report noted.
India's economy expanded by 7.9 percent in the fiscal second quarter with car and mobile phone sales booming and the share market on a roll.
But growth has been driven mainly by government stimulus, tax breaks and cheap interest rates that have provided vital juice for the economy during the worst global financial crisis since the 1930s.
Also, while India's cost-of-living has risen steeply recently, the central bank says interest rate hikes cannot cure the problem in this instance.
Food inflation, driven by crop shortages, is running at 17.4 percent and accounts for 80 percent of overall inflation, economists say.
The weakest monsoon in nearly four decades has hit agricultural output but the central bank expects food costs to decline as new winter crops are harvested.
After March, "inflation is likely to drop, and probably quite sharply," said HSBC economist Robert Prior-Wandesforde.
However, analysts predict that as food inflation comes down, non-food inflation will begin emerging as a bigger problem as global commodity prices rise and demand improves on the back of a recovering economy.
They expect that to prompt the central bank to slowly raise benchmark interest rates with the first hikes expected around April.
After half a dozen rate cuts since October 2008, the repo -the rate at which the bank lends to commercial banks stands at 4.75 percent, while the reverse repo, the rate at which it borrows from banks, is 3.25 percent.
"We're seeing the beginning of monetary tightening" in India, said Vaibhav Agrawal, research vice-president at Angel Broking.
"But the rate hike process will be gradual over a period of two years and will be unlikely to stifle demand," he added.
Budget: Service tax rate may be raised to 12 pc
With the government's fiscal deficit ballooning, there are chances of service tax rate being restored to 12 per cent in the upcoming
The government had last year cut down service tax rate from 12 to 10 per cent as part fiscal stimulus measures to help the economy tide over the then slowdown.
Official sources said service tax rates could be raised to the original level of 12 per cent as the booming sector is something the revenue department banks upon but the 2 per cent duty cut has brought a dip in the service tax revenues.
Together with cut in service tax and excise duty reductions, Plan expenditure was also stepped up, leading to widening of fiscal deficit as the total stimulus amounted to Rs 1,86,000 crore.
The fiscal deficit, which was projected to be 2.5 per cent of GDP at the beginning of 2008-09, crossed six per cent by the end of the fiscal. It is projected to further rise to 6.8 per cent this fiscal.
"With rising fiscal deficit to manage and the economy showing some signs of recovery, the government may withdraw the fiscal stimulus, though not completely. Service tax ambit could be widened and the rates may see upswing to the pre-stimulus period," said Ernst and Young Partner and Indirect Tax Leader Vivek Mishra.
CRR hike balances growth and inflation: RBI
Expressing concern over the rising food prices, the Reserve Bank today said its move to ask banks to keep more cash with it was a
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"Inflation has been driven mainly by rising food prices on the back of shortage of supplies. The wholesale inflation stands at 2.1 per cent if food items are excluded," RBI Governor D Subbarao said at a teleconference.
He added that while surging food prices are a concern, overall inflation is expected to moderate from July.
The Governor said banks have told him that its decision to raise the cash reserve ratio which is the proportion of deposits that banks have to park with the central bank, by 0.75 percentage point will not put an immediate pressure on interest rates as there is abundant liquidity in the system.
The RBI move will suck out Rs 36,000 crore from the system while banks have deposits of Rs 48 lakh crore as on January 15.
Food inflation stood at 17.40 per cent for the week ended January 16 while overall inflation was 7.31 per cent in December.
Subbarao said the RBI considered raising the short-term lending and borrowing (repo and reverse repo) rates but decided in favour of raising the CRR. "The hike was a carefully weighed trade-off between growth and inflation," he said.
Indian Union Budget 2010-2011 – Getting released on 26th Feb – Download Live webcast & Budget documents
Govt likely to continue with stable eco policies in budget
The Government is likely to continue with its existing policies to ensure economic stability in the forthcoming Union Budget, a top
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"The Government has always believed in stable policies. I am sure that this will continue in the coming budget," ICICI Bank's Non-Executive Chairman, K V Kamath, told reporters on the sidelines of a function organised by the Institute of Chartered Accountants of India here.
Commenting on the impact of the Cash Reserve Ratio (CRR) hike announced by the Reserve Bank last week, Kamath said the hike in CRR would not have a serious impact on availability of credit or on its pricing.
RBI hiked its cash reserve ratio by 0.75 per cent to 5.75 per cent in its monetary policy review last Friday. The move will be implemented in two stages. The first 0.50 per cent hike will come into effect on February 13 while the balance 0.25 per cent hike will be effective February 27.
The apex bank expects the move to result in a mop-up of Rs 36,000-crore from the system.
"With inflation stepping up, there was a need to show preparedness. Liquidity is so deep, it should not have any serious impact on the availability or pricing of credit," Kamath said.
Why Big B mum on Shah Rukh, Shiv Sena issue?
Bollywood megastar Amitabh Bachchan says he has chosen to remain tight-lipped over Indian Premier League (IPL) issue because he fears
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"They (the media) ask all the same questions on the film ('Rann') and the media and the angst among them. And then the real reason they are their - 'What sir are your takes on this IPL and Pakistan and Balasaheb and Shah Rukh events?'," Amitabh posted on his blog on Sunday from his Pratkeesha residence in Mumbai.
Shiv Sena activists demonstrated in front of superstar Shah Rukh's house in Bandra here Sunday to protest his comments favouring inclusion of Pakistani players in the Indian Premier League (IPL). They dubbed him a traitor and have demanded that he apologise.
"These are sensitive issues and I must remain out of it. Who and which channel shall distort, amend, cut paste, slow motion, back ground music my comment, one does not know. And also one does not know what stance the channel shall take on it. So, it is best to not comment at all," he added.
Shah Rukh is the co-owner of Kolkata Knight Riders IPL team.
BJP backs RSS stand on north Indians
Amid a war of words with the Shiv Sena over the issue of migrants in Mumbai, the BJP and RSS on Monday said there should be no
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"What the RSS has said (that North Indians should be protected in Maharashtra) is absolutely correct. All over India, every countryman has rights and all political parties should respect this basic feeling among all Indians," BJP vice-president Shanta Kumar said.
He said political parties should keep in mind that "just for politics, we should not divide the country".
RSS yesterday said it would protect North Indians living in Maharashtra, a contention that brought the chasm between BJP and Shiv Sena, its ally in the state, out in the open.
Shiv Sena and Raj Thackeray-led MNS have repeatedly targeted North Indians working in Maharashtra. Another senior RSS leader Sheshadari Chari today echoed the views of organsation's Chief Mohan Bhagwat on the issue.
"Every Indian should be protected everywhere, not only on Indian soil but also outside it. If Indians are attacked in Australia, even there they require to be protected. So it is not a question of North Indians being protected in Maharashtra and South Indians being protected in Delhi," he said.
Sheshadri insisted that RSS was opposed to this idea of "segregating the people on basis of community, caste, religion or language" as it amounts to dividing them.
Responding to Bhagwat's remarks, Sena leader Manohar Joshi had yesterday said, "The time has come to remind RSS that Mumbai belongs to Marathi people only."
Secret Swiss bank data comes from HSBC bank: Report
BERLIN: A disk said to contain the names of some 1,300 Germans evading the taxman by parking funds in Switzerland comes from British bank HSBC,
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The paper said the secret informant was 37-year-old Herve Falciani, an IT specialist from HSBC private bank in Geneva, who last year handed over similar data to the French authorities.
Falciani reportedly wants 2.5 million euros (3.5 million dollars) for the information, which could in turn net the German authorities some 100 million euros, the paper said, without naming its sources.
He was also at the heart of a similar spat between Switzerland and France resolved last week. Falciani had offered data concerning some 3,000 French taxpayers to the authorities.
But Switzerland, which guards its banking privacy laws jealously, demanded the return of the data, to which Paris eventually agreed.
The affair has prompted somewhat of a moral dilemma in Germany, with several politicians saying Berlin should not pay for stolen data. Others argued that the tax revenue that could be recouped was worth the price.
Nevertheless, there has been a precedent: in 2008, the German secret service paid five million euros for data stolen from Lichtenstein allowing authorities to pursue around 1,000 German tax evaders.
No fuel price hike till committee submits report: Deora
Petroleum Minister Murli Deora on Monday indicated that transport fuel prices will not increase till the Kirat Parikh committee
The Kirat Parikh committee was constituted for making recommendations to the government on carrying out reforms in the oil sector, including the pricing mechanism for transport fuels. The committee's report is long overdue.
"We want to see that the prices are not increased right now as it will have a cascading effect on other sectors," Deora told reporters here.
The minister also added that he will be meeting finance minister Pranab Mukherjee Tuesday regarding compensation for losses suffered by the oil marketing companies (OMC) -- Indian Oil, Bharat Petroleum and Hindustan Petroleum -- who have been selling fuel at a subsidised rate.
The total losses suffered by oil marketing companies this fiscal is around Rs.43,000 crore.
The finance ministry has so far only agreed to release Rs.12,000 crore in cash while the upstream energy companies Oil and Natural Gas Corp and OIL have also pitched in with some funds.
The petroleum ministry is trying to persuade the finance ministry to absorb the entire losses.
Petroleum Secretary S. Sundareshan, who assumed charge Sunday, said one of his priorities would be that OMC's do not suffer on account of the under-recoveries.
At current global prices, the three public sector companies are losing Rs.299 per cooking gas cylinder, Rs.17.23 per litre of kerosene, Rs.3.06 per litre of petrol and Rs.1.56 per litre of diesel.
India to beat China to become fastest growing economy: Montek
DAVOS: Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday expressed confidence that in the years to come India could emerge as
"We have accelerated ... not reached the full peak of our growth potential which could easily be 9 to 10 per cent. So, if India accelerates to say 10 per cent and China begins to decelerates you could have a situation where India grows faster than China," he told PTI at the conclusion of the five-day World Economic Forum meeting here.
India has been growing by over nine per cent till the global economic crisis hit the economy and pulled down the country's growth rate to 6.7 per cent during 2008-09.
During the current fiscal, the economy is expected to expand by over 7.75 per cent, as indicated by Finance Minister Pranab Mukherjee in his Mid-Year Review of the Economy which was tabled in Parliament in December.
China clocked a growth of 10.7 per cent during the quarter ending December retaining its position as the fastest growing economy during 2009. India grew by 7.9 per cent during July-September 2009 quarter.
Ahluwalia, who participated in several sessions during the 40th annual meeting of WEF at Swiss Alpine resort, also emphasised that the impression about India has changed among the global investor community.
India's rising incomes to pressure food supply: PM
NEW DELHI: Rising prosperity will increasingly put pressure on food supply in India and the country urgently needs to boost farm productivity,
After last year's failed monsoon rains, food prices have jumped in India, one of the world's top consumers of sugar, wheat, edible oils, rice and lentils, triggering protests in poorer regions and putting pressure on authorities to tighten monetary supply.
Indian demand has helped New York raw sugar futures surge to the highest in 29 years.
PM told a meeting of top bureaucrats from states that the country needed to increase farm productivity as food supply was an area of concern.
"Many felt that we have been able to control prices. But we have learnt that our growing population and higher levels of living necessitate augmentation of our food supplies," he said.
Last year, sugar prices in India doubled in step with global prices and forced India to import large quantities to ensure steady supplies.
"We must also recognise that in a globalised world, it will never be possible to insulate ourselves from the pulls and pressures of international demand and supply," Singh said.
He urged state governments to take steps to boost food output and tackle shortages of essential commodities.
India's consumption of items such as sugar, wheat, vegetable oils and lentils has increased steadily as the world's third-largest economy expanded rapidly.
Analysts say the government's welfare schemes and its focus on rural development has further increased demand in villages.
Reserve Bank of India last week lifted its wholesale price index inflation forecast for the end of the fiscal year in March to 8.5 percent from 6.5 percent and upgraded its economic growth forecast for 2009/10 to 7.5 percent from 6 percent, predicting a similar rate of growth the following year.
It said it expected inflation to moderate from July, assuming a normal monsoon and steady oil prices.
China, India factories buzzing, recovery intact
| BEIJING: China's manufacturing powered ahead in January, providing more evidence of its robust economic health to markets fretting about
A pair of surveys showed on Monday that China's vast manufacturing industry expanded at close to record pace last month as the world's third-largest economy continues to lead the global recovery. India, another emerging power that avoided recession and is coming out strongly from a soft patch, saw its factory sector expanding at the fastest clip in nearly 1-½ years. Euro zone and U.S. purchasing managers' surveys, due later on Monday, are also expected to confirm a pick up in manufacturing in major developed economies after. South Korean and Australian manufacturing surveys showed improvement too, in part feeding off China's growth burst in the past quarter that brought it back to its cruising speed of more than 10 percent. With interest rates at record lows and budgets deficits at multi-year highs after costly crisis-fighting efforts, investors are keen to see any signs that the recovery spurred by massive policy stimulus can carry forward without more public aid. COSTLY RESCUE The cost of preventing the global recession from turning into depression will be evident in U.S. budget estimates due at 1500 GMT. The White House will predict a record $1.6 trillion deficit for the fiscal year 2010, a congressional source told Reuters. Fears that Greece, Portugal and other smaller euro zone countries will struggle with servicing their heavy debt have also soured market sentiment, prompting investors to shun risky assets and driving stock markets lower. Beijing's steps to cool buoyant credit growth to prevent overheating also fanned concerns that they may prove too heavy-handed and derail the upturn at a time when other big economies have yet to regain their momentum. Chinese bank lending slowed sharply in the final 10 days of January, according to a newspaper report, but there was little evidence yet in Monday's data that the crackdown was hurting activity. An index based on an official survey of purchasing managers last month eased from a 20-month high in December but remained firmly in expansionary territory, while an index derived from a companion poll by HSBC scaled an all-time high. Both reports also showed a further rise in cost pressures leaving the authorities little choice but to keep tightening policy after they have steered debt yields higher at auctions, raised banks' reserve requirements and reined in lending. MORE TIGHTENING "Industrial activity continues to accelerate, implying stronger GDP growth in the first quarter. But rising input and output prices also point to greater inflationary pressure, which will likely prompt more tightening measures in the coming months," said Qu Hongbin, chief economist for China at HSBC. Markets found little comfort in the PMI data, focusing instead on the likelihood of further policy tightening. "Fears about stronger monetary tightening remained the key negative factor today," said Li Wenhui, analyst at Huatai Securities in Nanjing. The official survey also showed a rise in imports, a welcome news for several Asian economies, which heavily rely on the upturn in Chinese demand for a recovery in their exports. In fact, South Korea, Asia's fourth-largest economy reported that its exports to China jumped 88 percent year-on-year in January, even as overall export data disappointed markets and month-on-month growth was moderating. Despite growing concerns that Beijing's tightening campaign will sap demand for South Korean exports, January's purchasing managers' survey marked the fastest manufacturing expansion in more than two years, largely due to still rising export orders. Australia's manufacturing survey also showed expansion month and a jump in new orders suggested a further pickup ahead even as it remains the only G20 economy to have started raising interest rates to cool mounting price pressures. The euro zone Markit survey due at 0858 GMT is expected to show manufacturing growth edging up. In the United States, the Institute of Supply Management survey due at 1500 GMT is also forecast to show a pick-up in growth, but only compared with a downward revised December figure. The index is seen edging up to 55.2 from 54.9, though last month's original reading was at 55.9 points. | |
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NEW DELHI: The sense of comfort over India's food security is somewhat misplaced and both the availability of produce and controlling prices
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"Our experience in the past two years has brought to the fore the importance of food security and the need for containing prices," the prime minister told the first annual conference of chief secretaries here Monday.
"For some time past, there was a false sense of security that availability of food has ceased to be a concern. Similarly, many felt that we have been able to control prices," he said in a rather frank assessment of the ground reality.
He, accordingly, urged the state governments, too, to focus their energies on farm productivity and said there was great scope for improving the yields of major crops and hoped to see greater efforts in achieving this.
"Our agricultural productivity still ranks far below the best in the world."
Drawing comfort from the manner in which India handled the challenges posed by the global slowdown in a much better fashion than many other economies, the prime minister stressed that inclusive growth remained the government's centre-piece of development.
"Fast economic growth has little meaning if it does not lead to the well being of the poor and the disadvantaged, of our farmers and workers, of our children, students and women. The benefits of the development process have to percolate to every part of our country."
He said it was for the bureaucracy to ensure that the numerous welfare programmes of the federal and state governments are implemented in the spirit in which they have been conceived, without roadblocks and leakages, through decentralised governance.
"All this constitutes a huge task that requires dedication, commitment and persistence. I would like to add here that the central government does recognize that there is always room for improvement in these schemes and programmes."
The prime minister also expressed concern over poor infrastructure in the country and said states that have lagged behind must go that extra mile to remove all the bottlenecks.
"Shortages of electricity, poor roads, over-crowded ports, delayed flights, all retard our economic efficiency and damage our international image. States that have relatively better infrastructure attract investment while the others lag behind," he said.
"This is a lesson which all States have to imbibe."
Market Hot stocks: TVS Motors, TCS, Infosys, Pratibha Industries
Duration: 01:04
Posted: 1 Feb, 2010, 1201 hrs IST
Duration: 01:04
Posted: 1 Feb, 2010, 1201 hrs IST
One of the most expected budgets 2010-2011 is expected to release on Feb 26th because the usual budget release date Feb 28th falls on Sunday and also for Prophet Mohammad's birthday on 27th.
Finance Minister Pranab Muhkerjee will be presenting his second budget next month and it will be very critical for India to survive in the global economic crisis. In other hand, the budget will also be targeting on the GDP growth maintenance. The Interim Budget 2009-2010 was released last july and it was not acclaimed well by Indian citizens.
Will this coming budget will quench the thirst of high taxpayers?
Any special credit will be given to small business owners?
Will the automobile prices decrease or any tax benefits?
post your views on the comments section….
Stay tuned to get all the updates on Budget 2010, Feb 26th on http://indiabudget.nic.in/ . They will be releasing the Live Webcast of Pranab Mukherjee speech and the entire list of budget details in the website.
You can also access all the older budgets here.
Update 28-Jan-2010:
Budget Live link : http://budgetlive.nic.in/
Railway budget 2010-2011 will be presented on Feb 24th.
 | Income Tax notification dated 18.12.2009 on Perks.zip 21K Download |
Finmin upset at SBI debt math
NEW DELHI: The government has taken note of the State Bank of India (SBI) not making provisions for bad loans under agriculture debt relief
SBI would've reported a negative growth in its net profit for the October-December 2009 quarter last week had it made adequate provisioning for nonperforming loans arising out of the farm loan waiver scheme.
SBI reported a profit of Rs 2,479 crore for Q3, a Rs 1 crore increase over that for the corresponding period last year.
"While all public sector banks have made adequate provisions for such loans, SBI has only indicated that these loans may turn into non-performing assets (NPA). The bank should have been more prudent with its provisioning norms," said a finance ministry official, who do not wish to be quoted.
The government feels that the largest bank should have set an example rather concentrating on posting better results. "SBI's provision coverage ratio is also amongst the least. This is a wrong signal that would pass on to smaller banks in the public sector space," the official said.
The provision ratio for the bank is at 56.19%, while RBI stipulation mandates for a provision coverage ratio of 70%. SBI has, however, argued that it has followed all the banking norms and there is little cause for concern.
"All these accounts remain standard up to December 31. If these become NPA, that will be adjusted in the next quarter . The government is yet to take a decision on the matter," a senior SBI official said, requesting anonymity.
SBI has already reported a net increase of Rs 1,485 crore in its bad loans or NPA's in banking parlance in the third quarter of FY10.
Beware! Bank frauds are on the rise
NEW DELHI: If you are one of those who like playing it safe with hard-earned money and would rather stick to bank deposits, watch out. No lesser
Crores of rupees are disappearing from bank accounts or are being used deceitfully everyday. Recently, a bank branch manager recklessly sanctioned housing loans for the purpose of flats. On spot verification by the Central Bureau of Investigation (CBI), on the behest of the bank's chief vigilance officer, it transpired that the three storeyed building was constructed as a hotel.
Further investigation revealed that the branch manager had sanctioned many other housing loans against fabricated agreements of sale in fictitious names. By the time, the investigation was completed the bank had been duped of Rs 25 cr.
"This is an alarming scenario. Afterall, it is people's hard earned money. Banks the worldover keep a tight vigil as any slip will bring them down and even impact the economy," says Mayur Joshi, chair-man of Indiaforensic Research Foundation, a Pune-based consultancy which conducts fraud examination and forensic accounting in India.
Information collated by the CBI which SundayET is in possession of, bank frauds—the central investigation body tracks frauds valuing only a crore or above—amount doubled in 2008-09 from Rs 659 cr in 2007-08 to Rs 1,404 cr.
The number of such frauds also rose from 177 to 212. "The focus is on expeditious completion of investigation, close follow up of under-trial cases to conclude them without delay," says a CBI spokesperson. The CBI conducts its investigations through differ-ent wings--the Anti-Corruption Bureau, Bank Securities & Fraud Cell and the Economic Offences Wing.
The rising number of frauds has also got the central bank concerned. "It's high time banks strengthen their fraud management practices. In their bid to quickly expand and grow, they are losing focus on risk control," a senior official of the bank, who did not want to be named, says.
Not that the RBI isn't aware of the rising trend. In September last year, it had blamed senior management at banks for their failure to have proper risk management mechanism. It had then advised the banks to form a special committee chaired by their CEOs, who could oversee fraud investigation and make monitoring centralised rather than leaving it to the regional centres.
20 Indian banks in top 500 global banking list
1 Feb 2010, 0323 hrs IST
Bhanu Pande, ET Bureau
They may not be bankers to the world yet, but Indian banks have clearly set their eyes on that. In a year that saw the worst recession for the global banking industry with several big daddies collapsing, resilient Indian banks have improved their brand value rapidly. There are 20 Indian banks in the Brand Financeन् Global Banking 500, an annual international ranking by UK-based Brand Finance Plc, this year.
The State Bank of India (SBI) became the first Indian bank to break into the worldङs Top 50 list, according to the Brand Finance study that saw HSBC retain its top slot for the third year in a row.
The study, released on Sunday and made exclusively available to ET in India, used discounted cash flow methodology to arrive at a net present value (NPV) of the trademark and associated intellectual property: the brand value. SBIङs brand value more than tripled to $4,551 million, up from $1,448 million in 2009 helping it grab the 36th spot in the list. ICICI Bank, the countryङs largest private bank, joined it in the Top 100 list with a 130% jump in its brand value at $2,164 million. (READ FULL ARTICLE)
- Economy and Politics
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Mukherjee flexible on GST negotiations
Thursday's meeting between Mukherjee and the state finance ministers was dominated by talks on compensation to states on the revenue foregone on account of having reduced central sales tax
Sanjiv Shankaran
New Delhi: Finance minister Pranab Mukherjee struck a fine balance in the ongoing negotiations on the transition to the proposed goods and services tax (GST) by showing some flexibility on states' grievances but simultaneously asking them to widen their tax base.
Thursday's meeting between Mukherjee and the state finance ministers was dominated by talks on compensation to states on the revenue foregone on account of having reduced central sales tax (CST) preparatory to the transition to GST.
According to West Bengal's chief minister Asim Dasgupta, who also heads the body representing states in GST negotiations, the central government has promised to offset about 68%, or Rs9,676 crore, of the Rs14,181 crore of revenue states have forgone in 2009-10 on account of the CST rate cut.
When merchandise manufactured in one state is sold in another state, CST accrues to the state where the manufacturing centre is located.
Manufacturing states have cut CST to the current level of 2%, for which the Centre compensates them to offset forgone tax revenue.
CST would be scrapped in a GST regime.
The amount of compensation is similar to the amount Mukherjee offered states 20 days ago. But unlike the earlier meeting, Mukherjee showed flexibility on this occasion as he offered to discuss the possibility of the centre compensating states for the entire Rs14,181 crore revenue foregone at a later date, said a finance minister present at the meeting, who did not want to be named.
On the previous occasion, Mukherjee suggested states bear third of revenue forgone in their budget, which some states said was unfair.
According to Karnataka home minister V.S. Acharya, who was present at the meeting, Mukherjee suggested states bring textiles and sugar into the value-added tax (VAT) base. VAT is a tax on consumption levied by states and is to be folded into GST when the transition takes place.
In the backdrop of high food inflation, Acharya felt states could not immediately bring sugar into the VAT net.
Satya Poddar, partner at audit consultancy Ernst and Young, felt the move to get states to levy VAT on sugar and textiles was linked to an attempt to create a more comprehensive VAT base, which would lead to a better estimate of a fair GST rate.
"In this context (GST negotiations), the Centre's saying, let the base be comprehensive," Poddar said. "I don't see any technical difficulty in bringing textiles in VAT. If they haven't done it, it's inertia."
http://www.livemint.com/2010/01/28212117/Mukherjee-flexible-on-GST-nego.html
India to become fastest growing economy? 1 Feb 2010, 1957 hrs IST, PTI
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INCOME-TAX (THIRTEENTH AMENDMENT) RULES, 2009 - SUBSTITUTION OF RULE 3 AND INSERTION OF RULE 40F
Notification No. 94/2009/ F.No.142/25/2009-S O (TPL), dated 18-12-2009
In exercise of the powers conferred by section 295 read with sub-section (2) of section 17 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (13th Amendment) Rules, 2009.
(2) They shall be deemed to have come into force on the 1st day of April, 2009.
2. In the Income-tax Rules, 1962, for rule 3, the following shall be substituted, namely:-
3. For the purpose of computing the income chargeable under the head Salaries, the value of perquisites provided by the employer directly or indirectly to the assessee (hereinafter referred to as employee) or to any member of his household by reason of his employment shall be determined in accordance with the following sub-rules, namely:-
(1) The value of residential accommodation provided by the employer during the previous year shall be determined on the basis provided in the Table below:
TABLE I
Sl.
No. Circumstances Where accommodation is unfurnished Where accommodation is furnished
(1) (2) (3) (4)
(1) Where the accommodation is provided by the Central Government or any State Government to the employees either holding office or post in connection with the affairs of the Union or of such State. License fee determined by the Central Government or any State Government in respect of accommodation in accordance with the rules framed by such Government as reduced by the rent actually paid by the employee. The value of perquisite as determined under column (3) and increased by 10% per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air-conditioning plant or equipment) or if such furniture is hired from a third party, the actual hire charges payable for the same as reduced by any charges paid or payable for he same by the employee during the previous year.
(2) Where the accommodation is provided by any other employer and
(a) where the accommodation is owned by the employer, or
(b) where the accommodation is taken on lease or rent by the employer.
(i) 15% of salary in cities having population exceeding 25 lakhs as per 2001 census;
(ii) 10% of salary in cities having population exceeding 10 lakhs but not exceeding 25 lakhs as per 2001 census;
(iii) 7.5% of salary in other areas,
in respect of the period during which the said accommodation was occupied by the employee during the previous year as reduced by the rent, if any, actually paid by the employee.
Actual amount of lease rental paid or payable by the employer or 15% of salary whichever is lower as reduced by the rent, if any, actually paid by the employee.
The value of perquisites as determined under column (3) and increased by 10% per annum of the cost of furniture (including television sets, refrigerators, other household appliances, air-conditioning plant or equipment or other similar appliances or gadgets) or if such furniture is hired from a third party, by the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year.
The value of perquisite as determined under column (3) and increased by 10% per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air-conditioning plant or equipment or other similar appliances or gadgets) or if such furniture is hired from a third party, by the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year.
(3) Where the accommodation is provided by the employer specified in serial number (1) or (2) in a hotel (except where the employee is provided such accommodation for a period not exceeding in aggregate fifteen days on his transfer from one place to another) Not applicable 24% of salary paid or payable for the previous year or the actual charges paid or payable to such hotel, which is lower, for the period during which such accommodation is provided as reduced by the rent, if any, actually paid or payable by the employee:
Provided that nothing contained in this sub-rule shall apply to any accommodation provided to an employee working at a mining site or an on-shore oil exploration site or a project execution site, or a dam site or a power generation site or an off-shore site-
(i) which, being of a temporary nature and having plinth area not exceeding 800 square feet, is located not less than eight kilometers away from the local limits of any municipality or a cantonment board; or
(ii) which is located in a remote area:
Provided further that where on account of his transfer from one place to another, the employee is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with reference to only one such accommodation which has the lower value with reference to the Table above for a period not exceeding 90 days and thereafter the value of perquisite shall be charged for both such accommodations in accordance with the Table.
Explanation.- For the purposes of this sub-rule, where the accommodation is provided by the Central Government or any State Government to an employee who is serving on deputation with any body or undertaking under the control of such Government,-
(i) the employer of such an employee shall be deemed to be that body or undertaking where the employee is serving on deputation; and
(ii) the value of perquisite of such an accommodation shall be the amount calculated in accordance with Sl. No. (2)(a) of Table I, as if the accommodation is owned by the employer.
(2) (A) The value of perquisite by way of use of motor car to an employee by an employer shall be determined in accordance with the following Table, namely:-
TABLE II
VALUE OF PERQUISITE PER CALENDAR MONTH
Sl.
No. Circumstances Where cubic capacity of engine does not exceed 1.6 litres Where cubic capacity of engine exceeds 1.6 litres
(1) (2) (3) (4)
(1) Where the motor car is owned or hired by the employer and
(a) is used wholly and exclusively in the performance of his official duties;
(b) is used exclusively for the private or personal purposes of the employee or any member of his household and the running and maintenance expenses are met or reimbursed by the employer;
(c) is used partly in the performance of duties and partly for private or personal purposes of his own or any member of his household and-
(i) the expenses on maintenance and running are met or reimbursed by the employer;
(ii) the expenses on running and maintenance for private or personal use are fully met by the assessee.
No value:
Provided that the documents specified in clause (B) of this sub-rule are maintained by the employer.
Actual amount of expenditure incurred by the employer on the running and maintenance of motor car during the relevant previous year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged form the employee for such use.
Rs. 1,800 (plus Rs. 900, if chauffeur is also provided to run the motor car)
Rs. 600 (plus Rs.900, if chauffeur is also provided by the employer to run the motor car)
No value:
Provided that the documents specified in clause (B) of this sub-rule are maintained by the employer.
Actual amount of expenditure incurred by the employer on the running and maintenance of motor car during the relevant previous year including remuneration, if any, paid by the employer to the chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged form the employee for such use.
Rs. 2,400 (plus Rs. 900, if chauffeur is also provided to run the motor car)
Rs. 900 (plus Rs. 900, if chauffeur is also provided to run the motor car)
(2) Where the employee owns a motor car but the actual running and maintenance charges (including remuneration of the chauffeur, if any) are met or reimbursed to him by the employer and-
(i) such reimbursement is for the use of the vehicle wholly and exclusively for official purposes;
(ii) such reimbursement is for the use of the vehicle partly for official purposes and partly for personal or private purposes of the employee or any member of his household.
No value:
Provided that the documents specified in clause (B) of this sub-rule are maintained by the employer.
Subject to the provisions of clause (B) of this sub-rule, the actual amount of expenditure incurred by the employer as reduced by the amount specified in Sl. No. (1)(c)(i) above.
No value:
Provided that the documents specified in clause (B) of this sub-rule are maintained by the employer.
Subject to the provisions of clause (B) of this sub-rule, the actual amount of expenditure incurred by the employer as reduced by the amount specified in Sl. No. (1)(c)(i) above
(3) Where the employee owns any other automotive conveyance but the actual running and maintenance charges are met or reimbursed to him by the employer and
(i) such reimbursement is for the use of the vehicle wholly and exclusively for official purposes;
(ii) such reimbursement is for the use of vehicle partly for official purposes and partly for personal or private purposes of the employee.
No value:
Provided that the documents specified in clause (B) of this sub-rule are maintained by the employer.
Subject to the provisions of clause (B) of this sub-rule, the actual amount of expenditure incurred by the employer as reduced by the amount of Rs. 900.
Not applicable.
Provided that where one or more motor-cars are owned or hired by the employer and the employee or any member of his household are allowed the use of such motor-car or all of any of such motor-cars (otherwise than wholly and exclusively in the performance of his duties), the value of perquisite shall be the amount calculated in respect of one car in accordance with Sl. No. (1)(c)(i) of Table II as if the employee had been provided one motor-car for use partly in the performance of his duties and partly for his private or personal purposes and the amount calculated in respect of the other car or cars in accordance with Sl. No. (1)(b) of Table II as if he had been provided with such car exclusively for his private or personal purposes.
(B) Where the employer or the employee claims that the motor-car is used wholly and exclusively in the performance of official duty or that the actual expenses on the running and maintenance of the motor-car owned by the employee for official purposes is more than the amounts deductible in Sl. No. 2(ii) or 3(ii) of Table II, he may claim a higher amount attributable to such official use and the value of perquisite in such a case shall be the actual amount attributable to official use of the vehicle provided that the following conditions are fulfilled:-
(a) the employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage, and the amount of expenditure incurred thereon;
(b) the employer gives a certificate to the effect that the expenditure was incurred wholly and exclusively for the performance of official duties.
Explanation.- For the purposes of this sub-rule, the normal wear and tear of a motor-car shall be taken at 10% per annum of the actual cost of the motor-car or cars.
(3) The value of benefit to the employee or any member of his household resulting from the provision by the employer or services of a sweeper, a gardener, a watchman or a personal attendant, shall be the actual cost to the employer. The actual cost in such a case shall be the total amount of salary paid or payable by the employer or any other person on his behalf for such services as reduced by any amount paid by the employee for such services.
(4) The value of the benefit to the employee resulting from the supply of gas, electric energy or water for his household consumption shall be determined as the sum equal to the amount paid on that account by the employer to the agency supplying the gas, electric energy or water. Where such supply is made from resources owned by the employer, without purchasing them from any other outside agency, the value of perquisite would be the manufacturing cost per unit incurred by the employer. Where the employee is paying any amount in respect of such services, the amount so paid shall be deducted from the value so arrived at.
(5) The value of benefit to the employee resulting from the provision of free or concessional educational facilities for any member of his household shall be determined as the sum equal to the amount of expenditure incurred by the employer in that behalf or where the educational institution is itself maintained and owned by the employer or where free educational facilities for such member of employees household are allowed in any other educational institution by reason of his being in employment of that employer, the value of the perquisite to the employee shall be determined with reference to the cost of such education in a similar institution in or near the locality. Where any amount is paid or recovered from the employee on that account, the value of benefit shall be reduced by the amount so paid or recovered:
Provided that where the educational institution itself is maintained and owned by the employer and free educational facilities are provided to the children of the employee or where such free educational facilities are provided in any institution by reason of his being in employment of that employer, nothing contained in this sub-rule shall apply if the cost of such education or the value of such benefit per child does not exceed one thousand rupees per month.
(6) The value of any benefit or amenity resulting from the provision by an employer who is engaged in the carriage of passengers or goods, to any employee or to any member of his household for personal or private journey free of cost or at concessional fare, in any conveyance owned, leased or made available by any other arrangement by such employer for the purpose of transport of passengers or goods shall be taken to be the value at which such benefit or amenity is offered by such employer to the public as reduced by the amount, if any, paid by or recovered from the employee for such benefit or amenity:
Provided that nothing contained in this sub-rule shall apply to the employees of an airline or the railways.
(7) In terms of provisions contained in clause (viii) of sub-section (2) of section 17, the following other benefits or amenities and value thereof shall be determined in the manner provided hereunder:
(i) The value of the benefit to the assessee resulting from the provision of interest-free or concessional loan for any purpose made available to the employee or any member of his household during the relevant previous year by the employer or any person on his behalf shall be determined as the sum equal to the interest computed at the rate charged per annum by the State Bank of India, constituted under the State Bank of India Act, 1955 (23 of 1955), as on the 1st day of the relevant previous year in respect of loans for the same purpose advanced by it on the maximum outstanding monthly balance as reduced by the interest, if any, actually paid by him or any such member of his household:
Provided that no value would be charged if such loans are made available for medical treatment in respect of diseases specified in rule 3A of these Rules or where the amount of loans are petty not exceeding in the aggregate twenty thousand rupees:
Provided further that where the benefit relates to the loans made available for medical treatment referred to above, the exemption so provided shall not apply to so much of the loan as has been reimbursed to the employee under any medical insurance scheme.
(ii) The value of travelling, touring, accommodation and any other expenses paid for or borne or reimbursed by the employer for any holiday availed of by the employee or any member of his household, other than concession or assistance referred to in rule 2B of these rules, shall be determined as the sum equal to the amount of the expenditure incurred by such employer in that behalf. Where such facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public. Where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expenditure so incurred shall also be a fringe benefit or amenity:
Provided that where any official tour is extended as a vacation, the value of such fringe benefit shall be limited to the expenses incurred in relation to such extended period of stay or vacation. The amount so determined shall be reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity.
(iii) The value of free food and non-alcoholic beverages provided by the employer to an employee shall be the amount of expenditure incurred by such employer. The amount so determined shall be reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity:
Provided that nothing contained in this clause shall apply to free food and non-alcoholic beverages provided by such employer during working hours at office or business premises or through paid vouchers which are not transferable and usable only at eating joints, to the extent the value thereof either case does not exceed fifty rupees per meal or to tea or snacks provided during working hours or to free food and non-alcoholic beverages during working hours provided in a remote area or an off-shore installation.
(iv) The value of any gift, or voucher, or token in lieu of which such gift may be received by the employee or by member of his household on ceremonial occasions or otherwise from the employer shall be determined as the sum equal to the amount of such gift:
Provided that where the value of such gift, voucher or token, as the case may be, is below five thousand rupees in the aggregate during the previous year, the value of perquisite shall be taken as nil.
(v) The amount of expenses including membership fees and annual fees incurred by the employee or any member of his household, which is charged to a credit care (including any add-on-card) provided by the employer, or otherwise, paid for or reimbursed by such employer shall be taken to be the value of perquisite chargeable to tax as reduced by the amount, if any paid or recovered from the employee for such benefit or amenity:
Provided that there shall be no value of such benefit where expenses are incurred wholly and exclusively for official purposes and the following conditions are fulfilled:
(a) complete details in respect of such expenditure are maintained by the employer which may, inter alia, include the date of expenditure and the nature of expenditure;
(b) the employer gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties.
(vi) (A) The value of benefit to the employee resulting from the payment or reimbursement by the employer of any expenditure incurred (including the amount of annual or periodical fee) in a club by him or by an member of his household shall be determined to be the actual amount of expenditure incurred or reimbursed by such employer on that account. The amount so determined shall be reduced by the amount, if any paid or recovered from the employee for such benefit or amenity:
Provided that where the employer has obtained corporate membership of the club and the facility is enjoyed by the employee or any member of his household, the value of perquisite shall not include the initial fee paid for acquiring such corporate membership.
(B) Nothing contained in this clause shall apply if such expenditure is incurred wholly and exclusively for business purposes and the following conditions are fulfilled:-
(a) complete details in respect of such expenditure are maintained by the employer which may, inter alia, include the date of expenditure, the nature of expenditure and its business expediency;
(b) the employer gives a certificate for such expenditure to the effect that the same was incurred wholly and exclusively for the performance of official duties.
(C) Nothing contained in this clause shall apply for use of health club, sports and similar facilities provided uniformly to all employees by the employer.
(vii) The value of benefit to the employee resulting from the use by the employee or any member of his household of any movable asset (other than assets already specified in this rule and other than laptops and computers) belonging to the employer or hired by him shall be determined at 10% per annum of the actual cost of such asset or the amount of rent or charge paid or payable by the employer, as the case may be, as reduced by the amount, if any, paid or recovered from the employee for such use.
(viii) The value of benefit to the employee arising from the transfer of any movable asset belonging to the employer directly or indirectly to the employee or any member of his household shall be determined to be the amount representing the actual cost of such assets to the employer as reduced by the cost of normal wear and tear calculated at the rate of 10% of such cost for each completed year during which such asset was put to use by the employer and as further reduced by the amount, if any, paid or recovered from the employee being the consideration for such transfer:
Provided that in the case of computers and electronic items, the normal wear and tear would be calculated at the rate of 50% and in the case of motor cars at the rate of 20% by the reducing balance method.
(ix) The value of any other benefit or amenity, service, right or privilege provided by the employer shall be determined on the basis of cost to the employer under an arms length transaction as reduced by the employees contribution, if any:
Provided that nothing contained in this clause shall apply to the expenses on telephones including a mobile phone actually incurred on behalf of the employee by the employer.
(8) (i) For the purposes of clause (vi) of sub-section (2) of section 17, the fair market value of any specified security or sweat equity share, being an equity share in a company, on the date on which the option is exercised by the employee, shall be determined in accordance with the provisions of clause (ii) or clause (iii).
(ii) In a case where, on the date of the exercising of the option, the share in the company is listed on a recognized stock exchange, the fair market value shall be the average of the opening price and closing price of the share on that date on the said stock exchange:
Provided that where, on the date of exercising of the option, the share is listed on more than one recognized stock exchanges, the fair market value shall be the average of opening price and closing price of the share on the recognised stock exchange which records the highest volume of trading in the share:
Provided further that where, on the date of exercising of the option, there is no trading in the share on any recognized stock exchange, the fair market value shall be
(a) the closing price of the share on any recognised stock exchange on a date closest to the date of exercising of the option and immediately preceding such date; or
(b) the closing price of the share on a recognised stock exchange, which records the highest volume of trading in such share, if the closing price, as on the date closest to the date of exercising of the option and immediately preceding such date, is recorded on more than one recognized stock exchange.
(iii) In a case where, on the date of exercising of the option, the share in the company is not listed on a recognised stock exchange, the fair market value shall be such value of the share in the company as determined by a merchant banker on the specified date.
(iv) For the purpose of this sub-rule,
(a) closing price of a share on a recognised stock exchange on a date shall be the price of the last settlement on such date on such stock exchange:
Provided that where the stock exchange quotes both buy and sell prices, the closing price shall be the sell price of the last settlement.
(b) merchant banker means category I merchant banker registered with Security and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(c) opening price of a share on a recognised stock exchange on a date shall be the price of the first settlement on such date on such stock exchange:
Provided that where the stock exchange quotes both buy and sell prices, the opening price shall be the sell price of the first settlement.
(d) recognised stock exchange shall have the same meaning assigned to it in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(e) specified date means,
(i) the date of exercising of the option; or
(ii) any date earlier than the date of the exercising of the option, not being a date which is more than 180 days earlier than the date of the exercising.
(9) For the purposes of clause (vi) of sub-section (2) of section 17, the fair market value of any specified security, not being an equity share in a company, on the date on which the option is exercised by the employee, shall be such value as determined by a merchant banker on the specified date.
Explanation. - For the purposes of this sub-rule, merchant banker and specified date shall have the meanings assigned to them in sub-clause (b) and sub-clause (e) respectively of clause (iv) of sub-rule (8).
(10) This rule shall come into force with effect from the 1st day of April, 2009.
Explanation.- For the purposes of this rule-
(i) accommodation includes a house, flat, farm house or part thereof, or accommodation in a hotel, motel, service apartment, guest house, caravan, mobile home, ship or other floating structure;
(ii) entertainment includes hospitality of any kind and also, expenditure on business gifts other than free samples of the employers own product with the aim of advertising to the general public;
(iii) hotel includes licensed accommodation in the nature of motel, service apartment or guest house;
(iv) member of household shall include-
(a) spouse(s),
(b) children and their spouses,
(c) parents, and
(d) servants and dependants;
(v) remote area, for purposes of proviso to this sub-rule means an area that is located at least 40 kilometres away from a town having a population not exceeding 20,000 based on latest published all-India census;
(vi) salary includes the pay, allowances, bonus or commission payable monthly or otherwise or any monetary payment, by whatever name called from one or more employers, as the case may be, but does not include the following, namely:-
(a) dearness allowance or dearness pay unless it enters into the computation of superannuation or retirement benefits of the employee concerned;
(b) employers contribution to the provident fund account of the employee;
(c) allowances which are exempted from payment of tax;
(d) the value of perquisites specified in clause (2) of section 17 of the Income-tax Act;
(e) any payment or expenditure specifically excluded under proviso to sub-clause (iii) of clause (2) or proviso to clause (2) of section 17;
(f) lump-sum payments received at the time of termination of service or superannuation or voluntary retirement, like gratuity, severance pay, leave encashment, voluntary retrenchment benefits, commutation of pension and similar payments;
(vii) maximum outstanding monthly balance means the aggregate outstanding balance for each loan as on the last day of each month.
3. After rule 40E of the Income-tax Rules, the following rule shall be inserted, namely:-
40F. Nothing contained in this Part, shall apply, in respect of any assessment for the assessment year commencing on the 1st day of April, 2010 or any subsequent assessment year.
Note :- The principal rules were published vide notification No. S.O. 969(E) dated the 26th March, 1962 and last amended by Income-tax (12th Amendment) Rules, 2009 vide notification No. S.O. 2227(E), dated 02-09-2009.
