Budget 2018-19

  The government may not have to tap the bond market for the funds to finance free inoculation. India will need to spend an additional 800 billion rupees ($11 billion) to provide free vaccines and food to millions of people devastated by the deadly coronavirus wave, people with knowledge of the matter said. The government will earmark an additional 700 billion rupees for providing food to the poor and other eligible groups until November, said the people, who asked not to be identified as the numbers aren’t public. The administration will need an extra 100 billion rupees to provide free vaccinations, they said. Prime Minister  Narendra Modi  agreed Monday to provide free inoculations, reversing a policy where states ended up competing for supplies for certain age categories, leading to severe shortages. His administration also has been criticized for its handling of the second wave of the virus, which has killed thousands of people in India. In an address on national tele...

  Deposits are customers’ money and not govt assets, hence can’t be attached: Lenders Indian public sector banks with substantial presence abroad are legally ready to mount a challenge abroad to counter any efforts by Cairn Energy to attach their assets. The development comes on the back of Cairn Energy saying on Tuesday that it was taking all necessary action to access the $1.7 billion it was awarded by the international arbitration tribunal after overturning the retroactive tax demand slapped by the Indian government. Given that deposits with overseas branches is public money and not a sovereign asset, attaching funds in such accounts is beyond the realm of rights of the said company, said people in the know. Senior PSB chiefs said that the government had warned them of the possibility of Cairn attaching funds, and had asked the lenders to keep them (the government) informed. The government has nominated a person for prompt and co-ordinated response. The banks’ stand is clear — d...

  In 2017-18, West Bengal accounted for 15 per cent of the total contributions made to the NSSF; its share increased from 12.4 per cent in 2007-08 A day after the finance ministry announced a reduction in rates on small savings schemes as part of its periodic review, Finance Minister Nirmala Sitharaman   was quick to announce a rollback of the move on Thursday morning, calling it an “oversight” In a tweet, the FM said: “Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn.” If the ministry had gone ahead with its plan to lower the rates on small schemes up to 1.1 per cent, it would have been a second cut in two years and brought savings rate on many schemes, such as the  Public Provident Fund   (PPF), to historic lows. In the April-June quarter of last year, too, the government had cut rates on small...

  Demand includes highest ever net cash outgo of Rs 4.12 trillion in the second supplementary demands for grants Finance Minister Nirmala Sitharaman on Thursday sought Parliament’s approval for additional cash outgo of Rs 4.12 trillion, one of the highest ever in the second supplementary demand for grants in a financial year. The cash request is part of the total gross additional spending, pegged at Rs 6.28 trillion, after accounting for Rs 2.15 trillion of savings or reallocation from ministries with under-utilised funds.However, the provision for this gross additional spending was already being made in the revised estimates of the Union Budget announced on February 1. Of the total cash outgo, Rs 64,598 crore is towards enhanced expenditure fertiliser subsidy under  AtmaNirbhar Bharat Abhiyan 3.0  and Rs 20,466 crore for capital outlay for defence services have been sought. Sources said that the reason for higher cash demand is on account of stimulus packages announced a...

  A new voluntary vehicle scrapping policy, to phase out old and unfit vehicles, is to be announced, to encourage fuel-efficient, environment-friendly vehicles New impetus for the manufacturing sector Production-linked incentive schemes to create manufacturing global champions have been announced for 13 sectors. Rs 1.97 trillion over a five-year period starting FY22 has been allocated for these sectors, to enable manufacturers to develop scale and become an integral part of global supply chains. A voluntary vehicle scrapping policy soon A new voluntary vehicle scrapping policy, to phase out old and unfit vehicles, is to be announced, to encourage fuel-efficient, environment-friendly vehicles. Vehicles will undergo fitness tests in automated fitness centres after 20 years in the case of personal vehicles, and after 15 years in the case of commercial vehicles. New development finance institution to be created A new development finance institution (DFI) is to be created to provide lon...

  So, if a person moves to India and becomes a resident Indian for tax purposes, they get taxed on any income they earn in these accounts The FM announced relief for non-resident Indians (NRIs) from double taxation. In the US, there are pension plans like 401K and Individual Retirement Accounts, which are not taxable unless the subscriber withdraws from them. However, any income earned in these accounts gets taxed in India. This is because according to the current provisions of the I-T Act, income is taxable on accrual basis. So, if a person moves to India and becomes a resident Indian for tax purposes, they get taxed on any income they earn in these accounts. “The mismatch in the timing of taxation and double taxation is sought to be addressed by prescribing I-T Rules such that there is relief from double taxation,” said Sonu Iyer, tax partner & national leader, People Advisory Services, EY India.

  A combination of stepped-up social spending – including on long-neglected healthcare – and a state-led infrastructure push will make the recovery both durable and inclusive Union Budget 2021:  India’s federal budget Monday will be a much tougher balancing act than New Delhi’s regular annual fiscal trapeze. For one thing, the pandemic has upset business-as-usual calculations of how much to spend, on what, and how to finance it. For another, an impatience to make up for lost time has to be weighed against a shrinking of policy space in emerging markets: A reprise of the 2013 global taper tantrum could compound the country’s considerable domestic challenges. On the first question — how much to spend — Finance Minister Nirmala Sitharaman must simply do a lot more. Even with some loosening of the purse strings in the final months of the fiscal year that will end in March, Moody’s Investors Service affiliate ICRA Ltd. expects annual government expenditure to have been broadly unch...

  ‘Continued challenges’ faced by people in the coronavirus pandemic prompts tax department to extend deadlines. The deadline for individuals to file income tax returns has been extended by 10 days to January 10, 2021 due to “continued challenges” people face due to the coronavirus. The new deadline for filing GST annual return is February 28. The last date for declaration under Vivad Se Vishwas Scheme has been extended to December 31, 2020. The new date for furnishing of Income Tax Returns for taxpayers (including their partners) who have to get their accounts audited is January 31. The date for furnishing of Income Tax Returns for the taxpayers who are required to furnish report in respect of international/specified domestic transactions was extended to January 31, 2021. The date for furnishing of  Income Tax Returns  for other taxpayers was extended to December 31, 2020. “In view of the continued challenges faced by taxpayers in meeting statutory compliances due to out...

This stimulus comprises production-linked incentives approved by the Cabinet on Wednesday for as many as 10 sectors Economy News:  Ahead of Diwali, Union Finance Minister Nirmala Sitharaman on Thursday rolled out 12 measures as the Atmanirbhar Bharat 3.0 stimulus package to boost the economy. She announced a package worth Rs 1.2 trillion. If Wednesday’s production -linked incentive package is added, the stimulus comes to Rs 2.65 trillion. Some measures include a credit guarantee support scheme for medium and small businesses across 26 stressed sectors with a specific call-out for the health care sector; employment generation in both formal and informal segments; tax relief for real estate developers and home buyers; ease of doing business by relaxing criteria of locking up capital in infrastructure contracts; and fertiliser subsidy to farmers. This stimulus comprises production-linked incentives approved by the Cabinet on Wednesday for as many as 10 sectors, which will be operation...

The Centre had on October 23 transferred Rs 6,000 crore to 16 states and 2 UTs of Delhi and Jammu and Kashmir The Finance Ministry on Monday said it will transfer Rs 6,000 crore as the second tranche of GST compensation shortfall to 16 states and 3 Union Territories — including Maharashtra, Bihar, Assam, Puducherry and Delhi. The Centre had on October 23 transferred Rs 6,000 crore to 16 states and 2 UTs of Delhi and Jammu and Kashmir. In the second tranche of transfer, Union Territory of Puducherry has been included. “The Ministry of Finance, Government of India, under its ‘Special Window to States for meeting the GST Compensation Cess shortfall,’ will be releasing an amount of Rs 6,000 crore as second tranche to 16 States and 3 Union Territoriestoday,” the ministry said in a statement. This borrowing was done at an interest of 4.42 per cent, which is lower than the cost of borrowings for the states and UTs, thus benefitting them, it said. “Ministry of Finance has facilitated loans ofR...

  About two thirds of states opt for RBI-window of Rs 1.10 trillion, rest still want the Centre to borrow instead The Goods and Services Tax (GST) Council meeting on compensation for the states remained inconclusive on Monday, with 20-21 states opting for the Reserve Bank of India (RBI) window of Rs 1.10 trillion (earlier it was Rs 97,000 crore) and around 10 states insisting the Centre borrow and disburse the money. The next meeting is now scheduled for October 12. “The question was 20-21 states deciding to opt for the first option (the RBI window) and others wanting the Centre to borrow. Lots of discussion happened on that … Bihar Deputy Chief Minister Sushil Modi suggested that 3-4-5 days be given to the states to discuss the issue. I gave eight days and the next meeting will happen on October 12,” Union Finance Minister Nirmala Sitharaman said after the meeting. She said no state, irrespective of its choice, would be denied compensation. In her answer to a question, she said sh...

  FM Sitharaman said the government has turned the crisis into an opportunity as directed by the prime minister and has brought in several systemic reforms Finance Minister Nirmala Sitharaman has said that the economic recovery in the second quarter has been “patchy” so far and it is difficult to say with any degree of certainty whether the upswing would hold going forward. Dismissing criticism that the government is unwilling to provide fiscal support to revive demand and consumer spending, Sitharaman said the government has an open mind on the issue and a decision on when to spend and how much to spend will be taken at the appropriate time. In an interview to Business Standard, the minister said the intensity of the problem is unique and the government has been engaging with all stakeholders. However, at this point, no firm assessment has been made on the additional fiscal support. Sitharaman said the government has turned the crisis into an opportunity as directed by the prime m...

  This would help the proposal get cleared in the GST Council in case of voting The Centre has received support from 21 states and Union Territories (UTs) for its offer of the Rs 97,000-crore Reserve Bank of India (RBI) window giving them compensation under the goods and services tax (GST) regime. This will help clear this proposal at the GST Council in case of vote. The 21 states and UTs are Andhra Pradesh,  Arunachal Pradesh , Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Sikkim, Tripura, Uttarakhand, and Uttar Pradesh (UP), said finance ministry sources. The sources acknowledge that the GST Council needs only 20 states to pass any resolution in case voting is required, according to the GST Act. This may leave those not opting for any of the two options offered by the Centre before the GST Council meet scheduled for October 5 in the lurch. Sources said it is cl...