Value of Indian Rupee
Value of Indian Rupee
The impact and exchange rate
appreciation or depreciation of Indian Rupee against the dollar on different
sectors of Indian economy depends on a number of factors like elasticity of
exports and imports, import intensity of exports, relative prices of domestic
and global products etc. The softening of international commodity prices,
particularly crude oil prices, notwithstanding the moderate nominal
depreciation, will have favourable impact on the value of imports, trade and
current account balances as well as macroeconomic stability. While there is a
depreciation of the rupee vis-Ã -vis US dollar in nominal terms, the impact on
the economy is best assessed by the real effective exchange rate (REER) which
is defined as a weighted geometric average of nominal exchange rates of the
home currency in terms of the foreign currencies adjusted for relative price
differential. In terms of REER, there has been an appreciation of 3.7% in
2015-16 (April-October) compared to 2014-15 (April-October).
The average annual exchange rate of the rupee depreciated from Rs. 54.4 per US dollar in 2012-13 to Rs. 60.5 in 2013-14 and further to Rs. 61.1 in 2014-15. In the current fiscal 2015-16 (April-November), the average monthly exchange rate of rupee (RBIs reference rate) was Rs. 64.6 per US dollar.
The exchange rate of the rupee is by and large market determined. The Government and the RBI are closely monitoring the emerging external position including exchange rate of the rupee in nominal and real terms and on an on-going basis calibrating policies or regulations to support robust macroeconomic outcome.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
*****
Borrowing market money for
national development
The Government
borrows money from the market for national development. Borrowing is a
continuous process to bridge the gap between revenue and expenditure of the
Government in a financial year. The borrowings may be on account of
developmental schemes, creation of capital assets and revenue expenditure of
the Government.
The Union Budget 2015-16 has provided gross and net market borrowing at Rs. 6 lakh crore and Rs. 4.56 lakh crore respectively through auction of Government dated securities to meet the fiscal deficit.
Government of India is repaying the borrowed amount as per maturity schedule of the borrowing instruments. The scheduled repayments are managed through available resources or through borrowings, which amounts to roll over of debt. The Government and RBI inform the investors well in advance through Press Communiqué about the maturity date and the amount is paid through National Electronic Fund Transfer (NEFT) system.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
The Union Budget 2015-16 has provided gross and net market borrowing at Rs. 6 lakh crore and Rs. 4.56 lakh crore respectively through auction of Government dated securities to meet the fiscal deficit.
Government of India is repaying the borrowed amount as per maturity schedule of the borrowing instruments. The scheduled repayments are managed through available resources or through borrowings, which amounts to roll over of debt. The Government and RBI inform the investors well in advance through Press Communiqué about the maturity date and the amount is paid through National Electronic Fund Transfer (NEFT) system.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
********
Government Sets up Bank Board
Bureau (BBB) to Imporve The Governance of Public Sector Banks
With a view to
improve the governance of Public Sector Banks (PSBs), the Government has
decided to set up an autonomous Bank Board Bureau (BBB).
The Bureau will search and select heads of Public Sector Banks and help them in developing differentiated strategies and capital raising plans through innovative financial methods and instruments. The BBB is proposed to start functioning from 1st April, 2016.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
The Bureau will search and select heads of Public Sector Banks and help them in developing differentiated strategies and capital raising plans through innovative financial methods and instruments. The BBB is proposed to start functioning from 1st April, 2016.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
************
RBI Directives Against
Accumulation of Vulnerabilities and Sudden and Sharp Overshooting in Markets
Reserve Bank of
India (RBI) in its monetary policy statement dated December 1, 2015 has stated
that “following the early November release of robust US jobs data which
increased the likelihood of US monetary policy starting to normalize in
December, the US dollar has appreciated significantly, and US yields have
hardened. Bond markets in emerging market economies (EMEs) have generally been
tracking the hardening of US yields. Currency markets in EMEs have experienced selling
pressures as portfolio investors continue to exit them as an asset class.
Unease in investor sentiment is likely to increase ahead of the imminent
divergence in advanced economy monetary policy stances.”
Growth in bank credit and deposits has been relatively subdued in nominal terms in the recent past. Credit growth reflects a combination of factors such as reliance on alternative sources of funding, balance sheet repair and slack in demand as also an element of risk aversion.
During 2015-16 (till November 30, 2015), 53 companies raised approx. Rs. 18259 crores from primary capital market through issuance of equity shares and convertibles through Initial Public Officer (IPO) and Rights issue compared to 41 companies raising approx Rs. 3872 crores in corresponding period last year and 64 companies raising approx. Rs. 9788 crores from April 2014-March 2015.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
Growth in bank credit and deposits has been relatively subdued in nominal terms in the recent past. Credit growth reflects a combination of factors such as reliance on alternative sources of funding, balance sheet repair and slack in demand as also an element of risk aversion.
During 2015-16 (till November 30, 2015), 53 companies raised approx. Rs. 18259 crores from primary capital market through issuance of equity shares and convertibles through Initial Public Officer (IPO) and Rights issue compared to 41 companies raising approx Rs. 3872 crores in corresponding period last year and 64 companies raising approx. Rs. 9788 crores from April 2014-March 2015.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
********
Guidelines for Banks on
Refinancing Existing and Pending Infrastructural Projects
Reserve Bank of India (RBI)
guidelines are already in place on refinancing existing infrastructure and
other project loans. As per extant guidelines, banks are allowed to refinance
such loans by way of take-out financing, even without a pre-determined
agreement with other Banks/Financial Institutions (FIs) and fix a long
repayment period, without treating the same as restructuring if the following
conditions are to be satisfied:
i) Such loans should be ‘standard’ in the books of the existing banks and should not have been restructured in the past,
ii) Such loans should be substantially taken over (more than 50% of the outstanding loan by value) from the existing financing Banks/FIs, and
iii) The repayment period should be fixed by taking into account the life cycle of the project and cash flows from the project.
Vide RBI circular dated August 7, 2014, the above criteria of 50% of outstanding loan to be taken over was reduced to 25% of outstanding loan in respect of existing project loans with minimum aggregated exposure of Rs. 1000 crore from all institutional lenders. Banks may refinance such loans by way of full or partial take-out financing, even without a pre-determined agreement with other banks/FIs, and fix a long repayment period and the same would not be considered as restructuring in the books of the existing as well as taking over lenders, subject to certain other conditions.
RBI has informed that Banks have been representing that they are unable to provide long tenor financing (25-30 years) owing to asset-liability mismatch issues. Accordingly, in terms of RBI circular dated 15.7.2014, banks were specifically allowed to extend structured long term project loan with certain features: a) the tenor of the project loans may extend upto 80% of the initial economic life of the project; b) the loan amortization may be extended/changed upto 85% of initial economic life (subject to certain conditions) if there is a delay in project implementation or after DCCO (Date of Commencement of Commercial Operations), once during the life the project if the project cash flows are at variance with initial assumptions: c) periodic refinancing to avoid ALM (asset-liability management) issues subject to certain conditions; and d) variable pricing depending upon risk at each stage of the project. Subsequently, vide circular dated 15.12.2014, RBI have extended the above framework of flexible structuring of long term projects loans to existing loans to project, in which the aggregate exposure of all institutional lenders exceeds Rs. 500 crore, in the infrastructure sector and in the core industries sector.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
i) Such loans should be ‘standard’ in the books of the existing banks and should not have been restructured in the past,
ii) Such loans should be substantially taken over (more than 50% of the outstanding loan by value) from the existing financing Banks/FIs, and
iii) The repayment period should be fixed by taking into account the life cycle of the project and cash flows from the project.
Vide RBI circular dated August 7, 2014, the above criteria of 50% of outstanding loan to be taken over was reduced to 25% of outstanding loan in respect of existing project loans with minimum aggregated exposure of Rs. 1000 crore from all institutional lenders. Banks may refinance such loans by way of full or partial take-out financing, even without a pre-determined agreement with other banks/FIs, and fix a long repayment period and the same would not be considered as restructuring in the books of the existing as well as taking over lenders, subject to certain other conditions.
RBI has informed that Banks have been representing that they are unable to provide long tenor financing (25-30 years) owing to asset-liability mismatch issues. Accordingly, in terms of RBI circular dated 15.7.2014, banks were specifically allowed to extend structured long term project loan with certain features: a) the tenor of the project loans may extend upto 80% of the initial economic life of the project; b) the loan amortization may be extended/changed upto 85% of initial economic life (subject to certain conditions) if there is a delay in project implementation or after DCCO (Date of Commencement of Commercial Operations), once during the life the project if the project cash flows are at variance with initial assumptions: c) periodic refinancing to avoid ALM (asset-liability management) issues subject to certain conditions; and d) variable pricing depending upon risk at each stage of the project. Subsequently, vide circular dated 15.12.2014, RBI have extended the above framework of flexible structuring of long term projects loans to existing loans to project, in which the aggregate exposure of all institutional lenders exceeds Rs. 500 crore, in the infrastructure sector and in the core industries sector.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
*****
Consumer Price Index and Whole
Sale Price Index
In an emerging and developing
economy moderate inflation is desirable to spur growth impulses and sustained
deflation is a challenge as it generally lowers aggregate demand and economic
activity.
In the Indian economy inflation as per the Consumer Price Index-New Series (CPI) and other inflation indices has been in low positive territory while Wholesale Price Index (WPI) is in the negative zone, since November 2014. Under the Monetary Policy Framework Agreement signed between the Government and the Reserve Bank of India, year on year change in CPI has been accepted as the anchor for inflation in the Indian economy.
The behavior of WPI is influenced by the prices of international commodities including crude oil, which have been declining in the recent past while CPI inflation affects the ultimate consumers and includes consumer goods and services.
In view of movement in CPI inflation and growth in GDP, the Indian economy cannot be characterized as the one undergoing a deflationary situation.
To address the challenges posed to the Indian economy, the Government has undertaken a series of sectoral and macroeconomic reforms and is boosting aggregate demand through public investment in roads, railways and irrigation; liberalizing FDI flows; unblocking large number of stalled projects etc. Further, RBI has reduced the repo rates by 125 basis points since January 2015 which have impacted a reduction in interest rates and would spur investment and growth in the economy.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
In the Indian economy inflation as per the Consumer Price Index-New Series (CPI) and other inflation indices has been in low positive territory while Wholesale Price Index (WPI) is in the negative zone, since November 2014. Under the Monetary Policy Framework Agreement signed between the Government and the Reserve Bank of India, year on year change in CPI has been accepted as the anchor for inflation in the Indian economy.
The behavior of WPI is influenced by the prices of international commodities including crude oil, which have been declining in the recent past while CPI inflation affects the ultimate consumers and includes consumer goods and services.
In view of movement in CPI inflation and growth in GDP, the Indian economy cannot be characterized as the one undergoing a deflationary situation.
To address the challenges posed to the Indian economy, the Government has undertaken a series of sectoral and macroeconomic reforms and is boosting aggregate demand through public investment in roads, railways and irrigation; liberalizing FDI flows; unblocking large number of stalled projects etc. Further, RBI has reduced the repo rates by 125 basis points since January 2015 which have impacted a reduction in interest rates and would spur investment and growth in the economy.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
*****
Government of India and
Government of Japan signs a Protocol for amending the existing Convention for
the avoidance of double taxation and for the prevention of fiscal evasion
The Government of India and
the Government of Japan signed here today a Protocol for amending the existing
Convention for the avoidance of double taxation and for the prevention of
fiscal evasion with respect to taxes on income. The existing Convention was
signed way back in 1989. Dr Hasmukh Adhia, Revenue Secretary signed the
protocol on behalf of the Government of India while Mr Kenji Hiramatsu,
Ambassador of Japan on behalf of the Government of Japan. The Protocol signed
today gains all the more importance as it is being signed few hours before the
arrival of the Prime Minister of Japan in India.
The Protocol provides for internationally accepted standards for effective exchange of information on tax matters including bank information and information without domestic tax interest. It further provides that the information received from Japan in respect of a resident of India can be shared with other law enforcement agencies with authorisation of the competent authority of Japan and vice versa.
The Protocol also provides that both India and Japan shall lend assistance to each other in the collection of revenue claims. The Protocol further provides for exemption of interest income from taxation in the source country with respect to debt-claims insured by the Government/Government owned financial institutions.
The Protocol provides for internationally accepted standards for effective exchange of information on tax matters including bank information and information without domestic tax interest. It further provides that the information received from Japan in respect of a resident of India can be shared with other law enforcement agencies with authorisation of the competent authority of Japan and vice versa.
The Protocol also provides that both India and Japan shall lend assistance to each other in the collection of revenue claims. The Protocol further provides for exemption of interest income from taxation in the source country with respect to debt-claims insured by the Government/Government owned financial institutions.
*****
Signing of Advance Pricing
Agreements (APAs) signals major push towards tax certainty;22 APAs already
concluded in the current fiscal while 30 to 40 APAs expected to be finalized
before the end of the fiscal; the new momentum will go a long way in avoiding
disputes
The Central Board of Direct
Taxes (CBDT) has recently entered into eleven (11) more Advance Pricing
Agreements (APAs) with Indian subsidiaries for foreign companies. In a major
push towards providing certainty to foreign investors in the arena of transfer
pricing, the CBDT signed these APAs operating in various segments of the
economy like investment advisory services, engineering design services, marine
products, contract R&D, software development services, IT enabled services,
cargo handling support services etc.
While seven (7) of these APAs have rollback provisions contained in them, the other four (4) are Agreements for the future five years only. APAs with rollback provisions can cover a maximum period of nine (9) years in total. With this, the CBDT has so far entered into thirty one (31) APAs (thirty (30) unilateral and one bilateral).
It may be recalled that the APA programme was introduced in 2012 vide the Finance Act, 2012. In the first three years of the programme, a total of about 580 applications have been received from taxpayers. While CBDT concluded five (5) APAs within the first year, a further four (4) APAs got signed in the second year. This year has already witnessed a dramatic increase with the conclusion of twenty two (22) APAs and it is expected that further 30 to 40 Agreements could be finalized before the end of the fiscal. Analysts and experts feel this new momentum will go a long way in avoiding disputes.
While seven (7) of these APAs have rollback provisions contained in them, the other four (4) are Agreements for the future five years only. APAs with rollback provisions can cover a maximum period of nine (9) years in total. With this, the CBDT has so far entered into thirty one (31) APAs (thirty (30) unilateral and one bilateral).
It may be recalled that the APA programme was introduced in 2012 vide the Finance Act, 2012. In the first three years of the programme, a total of about 580 applications have been received from taxpayers. While CBDT concluded five (5) APAs within the first year, a further four (4) APAs got signed in the second year. This year has already witnessed a dramatic increase with the conclusion of twenty two (22) APAs and it is expected that further 30 to 40 Agreements could be finalized before the end of the fiscal. Analysts and experts feel this new momentum will go a long way in avoiding disputes.
*****
Repo Rate and Inflation
The Reserve Bank of India
(RBI) has cut the repo rate by 125 basis point since January 2015. The changes
in the repo rate by the RBI take time to impact the economy and are aimed at
securing a sustainable growth path over the medium term. The cuts in the repo
rate since January 2015 are expected to boost investment and consumption and
manage inflation within a comfortable band.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
*****
National Savings Schemes
Presently thirteen National Saving Schemes (NSS) viz Post Office Savings
Accounts, Time Deposits (1 year, 2 year, 3 year and 5 years), Monthly Income
Scheme, Post Office Recurring Deposit Scheme, National Savings Certificate
(VIII Issue), National Savings Certificate (IX Issue) [to be discontinued with
effect from 20.12.2015], Kisan Vikas Patra Scheme, Public Provident Fund
Scheme, Sukanya Samriddhi Account Scheme and Senior Citizens Savings Schemes are
under operation.
There has been no reduction in the amount being deposited under the NSS. In
fact, the gross collection figures have risen during the last three years as
under:
Rs. in crores
|
Year
|
Deposits (gross collection)
|
|
2012-13
|
234152.69
|
|
2013-14
|
250421.04
|
|
2014-15
|
304733.82
|
|
2015-16 (upto October 2015)
|
211977.52
|
The NSS are available for all Indian Nationals in rural areas as well as urban
areas. However, these schemes are mainly operated through Post Offices which
have large network in rural areas. At present, the Government has no proposal
to bring a new small savings policy for senior citizens and weaker sections.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry
of Finance in written reply to a question in Lok Sabha today.
*****
Bharat Fund
The Bharat Fund is
a public-private-academia partnership set up by Indian Institute of Management
(IIM) Ahmedabad’s Centre for Innovation Incubation and Entrepreneurship (CIIE).
The objective of the fund, inter-alia, is to support and provide funding (grants,
seed capital, venture capital) and business support to innovation-driven
start-ups that solve real problems faced by the masses of India through
technology-enabled and rapidly scalable solutions and will focus on –
healthcare and life-sciences (including biotech, medical devises),
sustainability (energy, agriculture, environment, water), and digital
technologies (especially in manufacturing, design).
The Bharat Fund shall be managed and coordinated by CIIE at the IIM, Ahmedabad.
As informed by IIM, Ahmedabad, the process involved shall include problem identification and crowd-sourcing of solutions, Expert Screening and Independent Investment Committee and Active Mentoring and Business Support for selection of beneficiaries. Bharat Fund will also organize accelerator and grant challenge program to source ideas for specific problems that may need new effective solutions to be created.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
The Bharat Fund shall be managed and coordinated by CIIE at the IIM, Ahmedabad.
As informed by IIM, Ahmedabad, the process involved shall include problem identification and crowd-sourcing of solutions, Expert Screening and Independent Investment Committee and Active Mentoring and Business Support for selection of beneficiaries. Bharat Fund will also organize accelerator and grant challenge program to source ideas for specific problems that may need new effective solutions to be created.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
******
Financial Impact on Employees
Under National Pension Scheme (NPS)
The National
Pension System (NPS) has been designed giving utmost importance to the welfare
of the subscribers under NPS. There are a number of benefits available to the
employees under NPS. Some of the benefits are enlisted below:
• NPS is a well designed pension system managed through an unbundled architecture involving intermediaries appointed by the Pension Fund Regulatory and Development Authority (PFRDA) viz, pension funds, custodian, central record keeping and accounting agency, National Pension System Trust, trustee bank, points of presence and annuity service providers. It is prudently regulated by PFRDA which is a statutory regulatory body established to promote old age income security and to protect the interests of subscribers of NPS.
• Dual benefit of low cost and power of compounding – The pension wealth which accumulates over a period of time till retirement grows with a compounding effect. The all-in-costs of the institutional architecture of NPS are among the lowest in the world.
• Tax Benefits – The tax benefits are available to the NPS subscribers under the provisions of the Income-tax Act, 1961. These were further increased in the Finance Bill, 2015.
• Transparency and Portability is ensured through online access on the pension account by the NPS subscribers, across all geographical locations and portability of employments.
• Partial withdrawal – subscribers can withdraw upto 25% of their own contributions before attaining superannuation age, subject to certain conditions.
Some representations have been received from certain quarters against the implementation of the NPS. The main demand in these representations is that NPS may be scrapped and the Government may revert to old defined benefit system. But the Government does not propose to reimplement the old pension scheme by doing away with NPS.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
• NPS is a well designed pension system managed through an unbundled architecture involving intermediaries appointed by the Pension Fund Regulatory and Development Authority (PFRDA) viz, pension funds, custodian, central record keeping and accounting agency, National Pension System Trust, trustee bank, points of presence and annuity service providers. It is prudently regulated by PFRDA which is a statutory regulatory body established to promote old age income security and to protect the interests of subscribers of NPS.
• Dual benefit of low cost and power of compounding – The pension wealth which accumulates over a period of time till retirement grows with a compounding effect. The all-in-costs of the institutional architecture of NPS are among the lowest in the world.
• Tax Benefits – The tax benefits are available to the NPS subscribers under the provisions of the Income-tax Act, 1961. These were further increased in the Finance Bill, 2015.
• Transparency and Portability is ensured through online access on the pension account by the NPS subscribers, across all geographical locations and portability of employments.
• Partial withdrawal – subscribers can withdraw upto 25% of their own contributions before attaining superannuation age, subject to certain conditions.
Some representations have been received from certain quarters against the implementation of the NPS. The main demand in these representations is that NPS may be scrapped and the Government may revert to old defined benefit system. But the Government does not propose to reimplement the old pension scheme by doing away with NPS.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
*****
Consumer Spending and Economic
Growth
As per the Central Statistics
Office, the final consumption expenditure (at constant 2011-12 prices)
increased from Rs. 6790253 crore in 2013-14 to Rs. 7222057 in 2014-15. The
growth rate of final consumption expenditure at constant prices was 6.5% and
6.4% in 2013-14 and 2014-15 respectively. The final consumption expenditure (at
constant 2011-12 prices) increased to Rs. 3799854 crore in first half of
2015-16 from Rs. 3571469 crore during the corresponding period of the previous
year, recording a growth of 6.4%.
The contribution of final consumption expenditure to GDP growth was 64.9% in 2013-14 and 59.7% in 2014-15. Corresponding to this, the contribution of fixed investment to GDP growth increased from 13.7% in 2013-14 to 19.6% in 2014-15.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
The contribution of final consumption expenditure to GDP growth was 64.9% in 2013-14 and 59.7% in 2014-15. Corresponding to this, the contribution of fixed investment to GDP growth increased from 13.7% in 2013-14 to 19.6% in 2014-15.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
*****
Resolving The Tax Disputes
The Income-tax
Act, 1961 provides the legal remedies that can be resorted to by taxpayers in
case they wish to dispute any tax demand raised in proceedings carried out by
Income-tax Authorities in accordance with the provisions of the said Act. These
remedies are regularly availed by the taxpayers for resolving tax disputes. The
Income-tax Act, 1961 also provides the option of settlement of tax disputes by
the Settlement Commission, which can be availed by the taxpayers as per the
provisions of the Act. Further, taxpayers can also approach for resolution of
tax disputes under the Mutual Agreement Procedure under tax treaties, in which
case, the Competent Authorities of the two contracting states endeavor to
resolve the dispute by way of negotiations.
In addition to the above, Notices of Dispute under Bilateral Investment Promotion and Protection Agreements (BIPAs) entered into by India have been received from some companies, namely Vodafone International Holdings BV, Vodafone PLC, Nokia Oyj, Cairn Energy PLC and Vedanta Resources PLC, wherein allegations have been made that tax proceedings undertaken by Income-tax Authorities under the provisions of the Income-tax Act, 1961 amounted to violation of obligations of India under the said agreements, and International Arbitration has been sought for resolving the alleged dispute under those agreements. It has been conveyed to these companies that the Government of India neither finds their allegations acceptable, nor agrees with their contention that tax disputes can be resolved under the said agreements. However in order to ensure that the interests of India in such arbitration proceedings are protected, Arbitrators have been appointed by the Government in accordance with the BIPAs.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
In addition to the above, Notices of Dispute under Bilateral Investment Promotion and Protection Agreements (BIPAs) entered into by India have been received from some companies, namely Vodafone International Holdings BV, Vodafone PLC, Nokia Oyj, Cairn Energy PLC and Vedanta Resources PLC, wherein allegations have been made that tax proceedings undertaken by Income-tax Authorities under the provisions of the Income-tax Act, 1961 amounted to violation of obligations of India under the said agreements, and International Arbitration has been sought for resolving the alleged dispute under those agreements. It has been conveyed to these companies that the Government of India neither finds their allegations acceptable, nor agrees with their contention that tax disputes can be resolved under the said agreements. However in order to ensure that the interests of India in such arbitration proceedings are protected, Arbitrators have been appointed by the Government in accordance with the BIPAs.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.
********
Efficient management of tax collection
The Government has informed that there are no indications about any slow or
inefficient collections of central taxes due to present system of collection.
The procedure has been in place and working efficiently. Moreover, improvement
in the system is a continuous process. Details of tax collections during the
last three financial years indicating the trend of collections are given below:
Rs. in crore
|
Nature of Taxes
|
2012-13
|
2013-14
|
2014-15*
|
|
Direct Taxes
|
558658
|
638544
|
695797
|
|
Indirect Taxes
|
474482
|
497061
|
544157
|
*provisional
In order to improve efficiency and quality of tax administration, the
government has introduced a revised appraisal forms i.e., Annual Performance
Appraisal Report (APAR) for taxmen, incorporating accountability parameters
relating to assessment and expanding tax base to reflect quantitative and
qualitative outcomes in order to further enhance the efficiency, which will
also improve the taxpayers’ services.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry
of Finance in written reply to a question in Lok Sabha today.
*****
Government Approves Seven (07)
Proposals of Foreign Direct Investment (FDI) Amounting to Rs. 5240.35 Crore
Approximately
Based on
the recommendations of Foreign Investment Promotion Board (FIPB) in its 227th meeting
held on 9th November 2015, the Government has approved Seven
(07) proposals of Foreign Direct Investment (FDI) amounting to Rs. 5240.35 crore.
The following Seven (07) proposals have been approved:
|
S. No.
|
Item No
|
Name of the applicant
|
Gist of the proposal
|
Sector
|
FDI (in Rs. Crore)
|
|
1
|
2
|
M/s India Advantage S4 I
|
M/s India Advantage Fund S4 I, a SEBI registered
AIF, has sought approval to (i) accept contributions up to a limit of `
2,950 crores from offshore investors into the Fund subject to AIF
Regulations under the FDI route and to issue class B units and class E units
and such other relevant units in the Fund to offshore investors, (ii) permit
the Fund to make investments in securities of the Indian companies in which
FDI is permitted, (iii) permit the Fund to distribute income realized on its
investment to the offshore investors under the automatic route
|
AIF
|
2950
|
|
2
|
8
|
M/s Menterra Venture
Advisors Private Limited
|
Approval has been sought by M/s Menterra Venture
Advisors Private Limited for 100% foreign investment in Menterra Social
Impact Fund (or such other name as SEBI may approve) which is a contributory
and determinate trust organized under the Indian Trusts Act, 1882 and in the
process of being registered with SEBI as a Category I Alternative Investment
Fund - Social Venture Fund
|
AIF
|
21.2
|
|
3
|
10
|
M/s Agio Image Limited
|
Approval
has been sought by Agio Image Ltd., Mauritius, for acquisition of equity
shares of
Dr. Naresh Trehan and Associates Health Services Private Limited (NTAHS) from RJ Corp, an Indian owned and controlled company |
Core Investment Company
|
75
|
|
4
|
12
|
M/s L&T Finance
Holdings Limited
|
Approval has been sought by BC Investments VI
Limited and BC Asia Growth Investments in L&T Finance Holdings Limited
(LTFH), by way of (i) BC Investments VI Limited subscribing to 3,18,36,971
equity shares, constituting 1.75% of the post issue equity share capital of
LTFH on a fully diluted basis and (ii) BC Asia Growth Investments
subscribing to 6,38,20,990 warrants, with each convertible into one equity
share within a period of 18 months from the date of allotment of warrants,
constituting 3.51% of the post issue equity share capital of LTFH on a fully
diluted basis
|
Financial Services
|
707
|
|
5
|
13
|
M/s Paragon Partners Growth
Fund
|
Approval has been sought by M/s Paragon Partners
Growth Fund for accepting contributions amounting to 80% of the Fund corpus
from non-resident investors in Paragon Partners Growth Fund, a Category II
Alternate Investment Fund.
|
AIF
|
985
|
|
6
|
14
|
M/s Strugence Debt Fund
|
Approval from the Foreign Investment Promotion
Board for accepting contributions up to INR 99 crores from Non Residents,
Non-Resident Indians, Non Resident Entities and Foreign owned entities over
a period of time in Class A units of Strugence Debt Fund I which is a scheme
of Strugence Debt Fund, a Category II Alternate Investment Fund registered
with Securities and Exchange Board of India. The Strugence Debt Fund 1 is
targeting to raise a corpus of INR 200 crores
|
Financial Services
|
99
|
|
7
|
16
|
M/s Extramarks Education
India Private Limited
|
Approval for investing in its 100% subsidiary
Indian company Extramarks Education India Private Limited for undertaking
digital publishing of education content and distribution to schools and
students through smart classes, test centres and digital medium such as
internet subscription, SD cards, Tablets etc.
|
Publication
|
403.15
|
The following Four (04) proposals have been deferred:
|
S. No.
|
Item No.
|
Name of the
applicant
|
Gist
of the proposal
|
Sector
|
|
1
|
4
|
M/s Sharekhan Limited
|
Acquisition
of up to 100% of the share capital of Sharekhan Limited other than the
shares held in Sharekhan Limited by Human Value Developers Private Limited
by BNP Paribas SA France and/or one or more of BNPs French subsidiaries. II.
Acquisition of 100% capital of Human Value Developers Private Limited by BNP
and/ or one or more of BNPs French subsidiaries.
|
NBFC
|
|
2
|
5
|
M/s
P C Ghadiali and Co LLP
|
P C Ghadiali and Co LLP, a CA firm has been
appointed by Mazav Management LLC, USA to apply on their behalf to FIPB for
the acquisition of 24% shareholding in Nexus Flight Operation Services India
Pvt. Ltd, held by Sovika Aviation Services Private Limited.
|
Ground Handling Services
|
|
3
|
9
|
M/s SunE Solar BV
|
Approval
is sought by SunE Solar B.V. to set up a LLP in India along with SunEdison
Energy India Private Limited and SunEdison Solar Power India Private Limited
|
LLP
|
|
4
|
15
|
M/s Software is Correct, Inc
|
Approval
sought for infusing fresh funds of upto US$ 15 million in its wholly owned
Indian subsidiary
|
IT/ITES
|
The following Five (05) proposals have been rejected:
|
S. No.
|
Item No.
|
Name of the
applicant
|
Gist
of the proposal
|
Sector
|
|
1
|
3
|
M/s Images Franchising
Management Pvt Ltd
|
Images Franchising Management Private Limited, a
WoS of Images Multimedia Private Limited has sought approval to convert into
a LLP.
|
LLP
|
|
2
|
6
|
M/s Marvel Data Services
LLP
|
Approval
has been sought for receiving USD 1,00,000 from Marvel Data Tech LLC, for
15% profit share.
|
LLP
|
|
3
|
7
|
M/s Limpkin Telecom Pvt Ltd
|
Approval
for issuing fresh investment for 100% equity by Ms. Jorden Elizabeth, a UK
citizen for an aggregate consideration of
Rs. 3.00 crore |
Telecom
|
|
4
|
11
|
M/s Euronet Services India
Pvt Ltd
|
Approval for amendment of the approval granted
whereby it was stated that the activity of operating a payment system by
issuance of Prepaid Payment Instrument falls within the 18 activities listed
for NBFC and hence, approval from FIPB is not required as the same falls
within the automatic route. Accordingly, Euronet India needs to comply with
the minimum capitalisation requirement of USD 50 Million.
|
NBFC
|
|
5
|
17
|
M/s Rocktec Sands LLP
|
LLP
|
The following one (01) proposal does not lie before FIPB:
|
S. No.
|
Item No.
|
Name of the
applicant
|
Gist
of the proposal
|
Sector
|
|
1
|
1
|
Verifone India Pvt Ltd
|
Approval has been
sought for conversion of outstanding interest due on ECB loan 1(USD 60,554)
and ECB Loan 2(USD 365,606) into equity shares to be issued to VeriFone Inc,
USA, parent company.
|
IT/ITES
|
Post a Comment