Bharat Rakshak

First, there is now a clear shift away from the old focus on reaching a “revenue-neutral rate”, which ended up being an arithmetic exercise, where state and central taxes were added up to create a new combined rate as close to the original rate as possible. This ended up creating unnecessarily high tax structures for items that are today far from being luxuries.

The abandonment of the idea of revenue-neutrality is essentially a move away from defensive thinking and that is good. It means Centre and states are now realising that the tax will deliver.

Second, implied in this move to whittle down the 28 per cent slab and move more items to the 18 per cent one is a medium-term commitment to adopting a four- or five-rate structure.

The real question-mark is about the one thing that no one is talking about: the choice given to small businesses to opt out of GST altogether through the composition scheme. Some small businesses pay 1 per cent of turnover (or a bit more in some cases) to avoid GST’s complex compliance structure. Most probably this is just a ruse to enable small businesses to conceal incomes from the taxman. Even restaurants end up in the 5 per cent bracket, but without the benefit of input tax credits.

As long as large segments of small and proprietary business are out of the GST net – which means the cycle of paying tax and claiming credit on input taxes is broken – GST will remain sub-optimal. These exemptions need to go ultimately, but before that the compliance burden on small firms should be eased so much that they find benefit in voluntary compliance.

But that change will probably come in stages after 2019. For now, the signal is that GST is on track to become better and simpler than it was on 1 July 2017. It is not yet an unqualified “good and simple tax”.

Banks and financial institutions, including SBI, PNB and LIC today entered into an overarching inter-creditor agreement (ICA) to fast-track resolution of stressed assets of Rs 50 crore or more which are under consortium lending. The ICA is being signed by 22 public sector banks (including India Post Payments Bank), 19 private sector banks and 32 foreign banks.

Besides, 12 major financial intermediaries, like LIC, HUDCO, PFC and REC are also signatories to the pact, according to the agreement. Under the pact, which is part of project ‘Sashakt’, each resolution plan will be submitted by the lead lender to an Overseeing Committee. “The lead lender that is the lender with the highest exposure shall be authorized to formulate the resolution plan, which shall be presented to the lenders for their approval,” an official statement said.

Under the ICA framework, the decision making will be by way of approval of ‘majority lenders’, those with 66 per cent share in the aggregate exposure. Once a resolution plan is approved by the majority lenders, it will be binding on all the lenders that are a party to the ICA, it said.

A bill for quick prosecution in cheque bounce cases and provide compensation to the complainant was passed by the Lok Sabha today. The Negotiable Instruments (Amendment) Bill, which was passed by a voice vote, provides for allowing a court trying a cheque bounce offence to direct the drawer (person who writes the cheque) to pay interim compensation to the complainant. This interim compensation, not exceeding 20 per cent, may be paid under certain circumstances, including where the drawer pleads not guilty of the accusation within 60 days of the trial court’s order to pay the compensation.

Earlier while moving the bill for passage, Minister of State for Finance Shiv Pratap Shukla said it will bring down ligitation and provide credibility to cheques and the banking system. He said the bill will reduce inordinate delays in cheque bounce cases. The bill seeks do away with “unnecessary” litigation in cheque dishonour cases.

“The banks would be helped by these amendments,” Shukla said urging members to support the measure. The bill, which amends the 1881 Negotiable Instruments Act, says if the drawer is acquitted, the court may direct the payee to repay the amount paid as interim compensation with interest.

suryag wrote:https://www.livemint.com/Opinion/AGbWj4 ... ficit.html

Suraj wrote:

Sachin wrote: Is this passed as a "Money Bill"? Or else the whole move can be scuttled at the Rajya Sabha. Most likely this bill has taken the "money bill" route .

No, it passes through the Rajya Sabha too. Date should be listed here sometime:
PRSIndia: The Fugitive Economic Offenders Bill, 2018

The Fugitive Economic Offenders Bill, aimed at preventing loan defaulters and financial frauds from evading legal process and fleeing the country, has been passed in the Rajya Sabha. The upper house of the Parliament passed the bill almost a week after the Lok Sabha passed it following a heated debate between the government and the opposition.

On April 21, the Union Cabinet had passed the proposal to promulgate Fugitive Economic Offenders Ordinance 2018. The bill allows the confiscation of properties and assets of economic offenders like loan defaulters who flee the country. The bill also allows tagging a person as a fugitive economic offender if that person has been found involved in any offence with a value over Rs 100 crore and has fled the country and refuses to face prosecution at home.

The government had explained earlier that the bill will allow a person to put in the list of the fugitive economic offender if that person has committed a scheduled offence, has a legal warrant issued against, and refuses to face criminal prosecution by fleeing the country. This will allow the authorities to confiscate the person’s assets.

On June 30, a special Prevention of Money Laundering Act (PMLA) court summoned Vijay Mallya to appear before it on August 27 on a plea filed by Enforcement Directorate’s (ED) that seek action him under the Fugitive Economic Offenders Ordinance for a bank fraud case of Rs 9,000 crore.

The UK’s Court of Appeal has refused Vijay Mallya the permission to appeal against a High Court order in favour of 13 Indian banks to recover funds amounting to nearly 1.145 billion pounds, in another setback to the embattled liquor tycoon. The 62-year-old businessman, who is separately undergoing an extradition trial in a UK court over fraud and money laundering charges by Indian authorities, had sought permission to appeal against the High Court order dated May 8. In the ruling, Judge Andrew Henshaw had refused to overturn a worldwide order freezing Mallya’s assets and also denied permission to appeal, which left Mallya with the only option of turning to the Court of Appeal.

Judge Henshaw’s order marked the first recorded case of a judgment of the Debt Recovery Tribunal (DRT) in India being registered by the English High Court, setting a legal precedent. The Court of Appeal judges looked into Mallya’s application seeking permission to appeal and decided against it yesterday.

As a result of the High Court order, the Indian banks – State Bank of India, Bank of Baroda, Corporation bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co Pvt Ltd – have the right to enforce the Indian judgment against Mallya’s assets in England and Wales.

A total of 44.74 lakh jobs were added in the formal economy during September-May, 2017-18, government data showed.

A_Gupta wrote:tradingeconomics.com reports that "Foreign Exchange Reserves in India increased to 405140 USD Million in July 20 from 405080 USD Million in the previous week."

A_Gupta wrote:One goes to the most convenient reliable source. Anyway, weekly foreign exchange reserves statistics are of interest mainly because of the sinking rupee. So it looks like the RBI has not (needed to?) defend the rupee this last week.

India's fiscal deficit narrowed to INR 4.29 trillion in April-June 2018 from INR 4.42 trillion in the same period of the previous fiscal year, as revenues jumped 33.3 percent to INR 2.79 trillion and total expenditure went up at a slower 8.7 percent to INR 7.08 trillion. The budget gap was equivalent to 68.7 percent of the government’s target for the whole financial year, compared with 80.8 percent a year ago

India’s fiscal deficit rose further in June inching closer to the government's budgetary estimate for financial year 2018-19.

Fiscal deficit, the gap between the government's revenue and expenditure, rose to Rs 4.29 lakh crore at the end of June, according to data released by the Controller General of Accounts. That’s 68.7 percent of the targeted Rs 6.24 lakh crore in 2018-19.

The gap is lower than what it was in June last year, at 80.8 percent of the FY18 target, as the government had front loaded expenditure to kickstart the investment cycle. India's finances were constrained then as it had to revise its deficit target upwards due to the implementation of the Goods and Services tax. It aims to keep the deficit within 3.3 percent of the country’s gross domestic product for the current financial year.

The government’s total expenditure for April-June rose to Rs 7.07 lakh crore, or 29 percent of the full-year target. Revenue receipts stood at 15.5 percent of the target at Rs 2.67 lakh crore.

Tax revenue was at Rs 2.37 lakh crore, or 16 percent of the full-year target. Non-tax revenue hit 12.5 percent of the target at Rs 30,601 crore. Capital expenditure reached 29 percent of the FY19 target, compared to 22.1 percent in the same period last year.

Growth of eight core sectors expanded to 7-month high of 6.7 per cent in June due to better performance by cement, refinery and coal segments, as per official data released on Tuesday.
The eight sectors, which also include fertilisers, steel, natural gas, electricity and crude oil, had expanded by 1 per cent in June last year.


The previous high rate of growth was recorded in November 2017 at 6.9 per cent.

The growth rate in May was 4.3 per cent.

As per the data released by the commerce and industry ministry, the expansion in cement, refinery products and coal was 13.2 per cent, 12 per cent and 11.5 per cent respectively, year-on-year basis.

Crude oil and natural gas registered a negative growth of 3.4 per cent and 2.7 per cent respectively in June compared to the year-ago period.

The expansion in the electricity generation was 4 per cent in June compared to 2.2 per cent in the same month of the last fiscal.

For more than three centuries, a plague of unshakable lethargy blanketed the American South.

It began with “ground itch,” a prickly tingling in the tender webs between the toes, which was soon followed by a dry cough. Weeks later, victims succumbed to an insatiable exhaustion and an impenetrable haziness of the mind that some called stupidity. Adults neglected their fields and children grew pale and listless. Victims developed grossly distended bellies and “angel wings”—emaciated shoulder blades accentuated by hunching. All gazed out dully from sunken sockets with a telltale “fish-eye” stare.

The culprit behind “the germ of laziness,” as the South’s affliction was sometimes called, was Necator americanus—the American murderer. Better known today as the hookworm, millions of those bloodsucking parasites lived, fed, multiplied, and died within the guts of up to 40% of populations stretching from southeastern Texas to West Virginia. Hookworms stymied development throughout the region and bred stereotypes about lazy, moronic Southerners.
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Government’s finances have shown improvement in the June quarter of 2018-19 with fiscal deficit working out to 68.7 per cent of the Budget Estimate, mainly on account of higher revenue collection, official data reveal. The deficit was at 80.8 per cent of BE in the April-June quarter of last fiscal. In actual terms, the fiscal deficit or gap between the total expenditure and receipts was Rs 4.29 lakh crore. The government had budgeted to cut fiscal deficit to 3.3 per cent of GDP in the current fiscal, from 3.53 per cent in 2017-18. The fiscal deficit target for the current financial year is Rs 6.24 lakh crore.

As per the data released by the Controller General of Accounts (CGA), the tax collection at end-June was Rs 2.37 lakh crore or 16 per cent of the BE.
The total receipts of the government were Rs 2.78 lakh crore during April-June quarter or 15.3 per cent of the BE. In the similar period of 2017-18, the collection was 13.1 per cent of the BE.

The CGA data showed that total expenditure during the first three months of the fiscal was Rs 7.07 lakh crore or 29 per cent of the BE. The expenditure was marginally higher as a percentage of BE in the last fiscal.

The capital expenditure was Rs 86,988 crore or 29 per cent of the BE, the CGA said.

Corporate India’s business optimism index for the July-September quarter registered an 11.7 per cent increase over last year, while on a quarter-on-quarter basis it has declined, says a report. The Dun & Bradstreet Composite Business Optimism Index stood at 80.6 during the third quarter of 2018, an increase of 11.7 per cent as compared to the corresponding period last year.

Business optimism was low in the July-September quarter of 2017, as a result of implementation issues on goods and services tax (GST) and effects of demonetisation. “So, compared with that (July-September 2017), current sentiment is better,” Dun & Bradstreet Managing Director – India Manish Sinha said, adding that on a quarter-on-quarter basis, the index has declined due to the domestic and global headwinds.

Yet the index has now held above the 50-mark that separates growth from contraction for 12 straight months, indicating the economy was on a reasonably solid footing and could retain the title of fastest growing major economy in the coming quarters.

Mumbai: The Reserve bank of India’s (RBI’s) monetary policy committee (MPC) on Wednesday raised repo rates by 25 basis points to 6.5% on account of inflationary pressures arising due to hike in minimum support price (MSP). The six-member committee voted to keep its policy stance neutral, signalling the door open for future rate hikes. A majority of economists surveyed by Mint was in today’s monetary policy.

One basis point is one-hundredth of a percentage point.

RBI also raised the average inflation projection for the second half of the year to 4.8% from 4.7% in June. The central bank expects inflation to edge higher to 5% in the first quarter of next fiscal year.

The monetary policy statement also cited the as the primary factor stoking inflation this year. The government has fixed the MSP at 150% of the cost of production of all kharif crops.

“This , which is much larger than the average increase seen in the past few years, will have a direct impact on food inflation and second round effects on headline inflation,” said RBI in its policy statement. The central hike also highlighted its concerns over crude oil prices as it remains elevated despite seeing a slight moderation.

The central bank, however, remains sanguine about the overall performance of monsoon as it augurs well for food inflation in the medium-term.

On growth outlook, RBI remains confident of a strong economic activity supported by monsoon, strong rural demand due to MSP hike and rising investment activity.

“The MPC notes that domestic economic activity has continued to sustain momentum and the output gap has virtually closed,” said the policy statement.

The MPC also cited uncertainty around domestic inflation and recent global developments as concerns going forward.

“Rising trade protectionism poses a grave risk to near-term and long-term global growth prospects by adversely impacting investment, disrupting global supply chains and hampering productivity,” said the statement.

The decision of the MPC was not unanimous unlike the previous policy. Five out of six MPC members voted in favour of a rate hike with Ravindra Dholakia voting against the decision.

the 30000 crores India has spent on rescuing Air India since 2012 is worth 4 years of ISRO budget. and the Air India has another 7 billion dollars in loans.

How Chinese goods are choking Indian industry and economy: The hard numbers

Parliamentary panel finds re-routing of Chinese goods through markets India has FTAs, under-invoicing to disturb trade balance, calls for product specific strategies

Abhishek Waghmare & Subhayan Chakraborty
New Delhi
July 28, 2018


India's trade policy must evolve.

“Chinese imports have thrown a spanner in the wheel of India’s economic progress per se, and the industrial sector in particular,” the parliamentary standing committee on commerce voiced in its report tabled last week.

Beginning with hard numbers that establishes its basic premise of huge and constantly growing Sino-Indian trade imbalance, the report dwells on the boiling debate on the market economy status to China, echoing a similar line of thought implicit in the US-initiated trade war.


Identifying the problem of costly capital in India vis-à-vis China, it suggests product specific strategies for improving the trade balance, underlining the accountability of pertinent institutions, including the Directorate General for Anti-Dumping and Allied Duties and the Risk Management Division of the Central Board of Indirect taxes and Customs.

The Committee found that Chinese manufacturers were re-routing their products through the markets of other countries that India has Free Trade Agreements (FTA) with. Straddling the South East Asia, underdeveloped members of ASEAN have served as hubs for Chinese exporters to circumvent anti-dumping and countervailing duties, it says.

It has recommended a relook at the Least Developed Countries (LDC) arrangements and joint verification/ certification mechanism with the partner countries.

The report has also expressed skepticism about India's ongoing negotiations with these nation and China, among others for the Regional Comprehensive Economic Partnership (RCEP) agreement.

It expressed hope that India might offer to reduce its tariffs by 74-86 per cent of all goods.

The unscrupulous imports from China are also on account of influx of under-invoiced Chinese goods, goods brought in through mis-declaration and outright smuggling, it says.

These illegalities have its share of adverse effect on domestic industry, the report declared. In April to December 2017-18, as many as 1,127 cases of smuggling have been registered by India, recovering more than Rs 5.4 billion worth of Chinese goods.

However, it also calls for measures such as encouraging people to buy Indian products, popularising ‘Swadeshi apnao’ (consume domestic goods) and generate positive public opinion about Indian goods, which, trade experts say, contribute little to revive domestic industry.

We look at the committee’s view from the perspective of data to understand the depth of the trade imbalance.

The big picture

16.6%: Chinese share in India’s imports grew from 11.6 per cent in 2013-14 to 16.6 per cent in 2017-18. This came as a result of Chinese imports growing at a staggering 20 per cent in 2017-18, compared to 9 per cent growth four years ago. India exports grew by 9.8 per cent in 2017-18.

$50 bn: In a decade to 2017-18, India’s exports to China rose by $2.5 billion. In the same period, China’s imports in India rose by $50 billion. India registered a trade deficit of $157 billion in 2017-18.

5%: Chinese government gives an effective rebate of 17 per cent to its exporter companies.

This, the committee says, results in Chinese goods being 5-6 per cent cheaper than their Indian counterparts, making it lucrative for Indian importers.

9%: On account of costlier energy, finance and logistics, Indian goods are costlier by about 9 per cent in the global market. Chinese industry gets loans at 6 per cent, compared to 11-14 per cent in India. Logistics costs are 1 per cent of the business in China, compared to 3 per cent in India.

294: Of the 803 licenses provided by the Bureau of Indian Standards (BIS) to foreign manufacturers selling in India under the Foreign Manufacturer Certification Scheme (FMCS), 294 licenses for 55 products have been granted to Chinese manufacturers.

A similar scheme has also provided 9,274 registrations for information technology and electronics products. Of this, 5857, 0r 64 per cent, registrations have been granted to Chinese manufacturers.

8%: Despite the fact that 75-80 per cent of Chinese steel products are covered under anti-dumping duty, their imports have increased 8 per cent in 2017-18.

Sectors that have been impacted

Industry Key number and how badly it hurts

Recommendations

Pharmaceuticals

1,200%: In the life-saving drugs category, the dependence on Chinese imports is as much as 90 per cent. As much as 75% of the APIs (Active Pharmaceutical Ingredients) used in the formulations of essential drugs in the National List of Essential Medicines (NLEM) are sourced from China.
China has increased the prices of bulk drugs 11-fold, or 1,200 per cent, during last two years.

Revive India’s fermentation based API capability.

Solar

90%: Chinese solar imports form 90% of the India’s market share directly or indirectly through their offshore companies across South East Asia. Further, its dumping prices in India are lower than that of the price at which they sell in Japan, Europe or the US.
Under the Special Incentive Package Scheme, no domestic manufacturer has got any capital subsidy till now.

Domestic industry must pursue innovation that will help in further reduction in price per unit.

Anti-dumping duty may be levied in a differential manner to facilitate level pegging for domestic industry.

Textile

35%: Cheap Chineseimports have resulted in 35 per cent closure of power looms in Surat and Bhiwandi, the report notes.
It fires a salvo at the GST structure, stating that taxing synthetic fibres at 18 per cent, yarns at 12 per cent and fabrics at 5 per cent has caused unintended benefit to China resulting in increased imports of fabric from there.

Need to look at the LDC arrangements wherein imports from LDCs are fully exempt.

Increase the customs duty on garment imports.

Modernize the power loom and handloom sector for mass production with quality.

Toys

85%: About 85-90 per cent of toy market space is commanded by Chinese products, the report says. It has affected 50 per cent of the domestic toy industry.
Low-priced Chinese toys are either mass-produced or are rejects from other countries and are diverted to Indian sub-continent/ Africa. Further, Chinese toys are toxic in high proportion, it says.

Issue quality control order (QCO) for toys and ensure toxic and cheap quality Chinese toys do not enter the country.

Import of finished toy products from China be banned

Bicycles

58%: Bicycle imports from China saw a rise of 58 per cent in volume and 47 per cent in value in April to October 2017 over the previous year.
Further, under-invoiced bicycles constitute 85% per cent of the total bicycle imports from China in 2017-18.
Apart from affecting bicycle manufacturers, it is gradually killing the unorganized industry of small bicycle parts manufacturers who provide employment to many skilled and unskilled workers.

Carry out detailed analysis of the customs data in order to unravel the modus operandi of the unscrupulous importers involved and curb the entry of under-valued Chinese bicycles into the country.

Source: Impact of Chinese Goods on Indian Industry, 145th report of Parliamentary standing committee on commerce