One of the most laudable achievements of Modi – government is its sticking to the fiscal consolidation road-map. Thus, even as it stuck to fiscal deficit [FD] target of 3.9% of GDP during 2015-16, for current year also, it has set an ambitious target of 3.5%. For 2017-18, it aims at lowering it further to 3.0%. In this backdrop, it was rather intriguing for finance minister, Arun Jaitely announcing [budget speech for 2016-17], the government’s intent to review Fiscal Responsibility and Budget Management [FRBM] Act with a view to make the target flexible. He was alluding to make it range bound instead of a fixed number as has been the position hitherto under the extant Act in vogue since 2003....
More
No comments
Category: Fiscal deficit/subsidies
Empowering poor via stemming loot
On completion of 2 years in office, Modi – government is presently taking stock of what it has done and its achievements. Even while directing all his cabinet ministers to disseminate their work to the public at large, prime minister himself has taken the lead and is addressing a number of public rallies to highlight key thrust areas. Undoubtedly, this government has many achievements to its credit and as rightly observed during his address at India Gate on May 28, 2016, highlighting all its major programs/schemes and initiatives will consume a full week of broadcast from Doordarshan [the official channel of the Government of India]. While, every bit of Team Modi’s dedicated and relentless work is worth capturing for its...
More
No comments
Hapless poor in kingdom of charity
One of the fundamental rights conferred by our constitution to all citizens is the “right to work” for earning a decent living and good quality of life. This can be ensured in a sustainable manner only when the state puts in place requisite policy framework conducive to promoting entrepreneurship, mechanisms for institutional funding of projects, builds infrastructure [roads, highways, ports, rails, irrigation etc] and sets up institutions for imparting education and skills etc all essential ingredients that help create opportunities for work. For six-and-a-half decade since 1950 [the year when the constitution was adopted], these aspects received scant attention resulting in a grim scenario whereby creation of job opportunities are miniscule when compared to the needs. At present, there are...
More
No comments
Grant full autonomy
REJUVENATING PSU banks Last year, a Reserve Bank of India (RBI) committee headed by P Nayak made sweeping recommendations aimed at bringing about structural reforms of public sector banks (PSBs) to enable them meet expanding requirements of an economy on accelerated growth trajectory and improve its competitiveness among the comity of world nations. The committee recommended (i) setting up of an autonomous Bank Boards Bureau (BBB) with a mandate to select the top management; (ii) setting up of a bank investment company (BIC) where all government shares in PSBs will be vested and (iii) divestment of its shareholding in all PSBs to below 50%. BBB was contemplated as an interim arrangement precursor to the BIC. The most crucial of these...
More
No comments
Poverty alleviation – Modi vs Congress
Modi’s political opponents have often accused him of dovetailing his policies and programs for the benefit of industrialists and businessmen ignoring farmers and workers. Nothing could be farther from the truth. If, there is any prime minister who has devoted maximum time to this vast constituency, it is none other than Modi. For generations, poor farmers, landless workers and millions of others were made to survive on subsidies even as a big slice of that never reached them as stated by former prime minister Rajiv Gandhi in a most condescending manner “only 15 paise out of Rs 1 allocated under welfare schemes actually reaches the beneficiaries”. There was not even a whisper of making them economically self-reliant. Modi has brought...
More
No comments
Burden on shareholders
In the Union Budget for 2016-17, Finance Minister Arun Jaitely proposed that if the dividend income earned by a resident individual, HUF (Hindu Undivided Family) or firm exceeds Rs 10 lakh, it will be taxed at the rate of 10% in the hands of the recipient. This is over and above the dividend distribution tax (DDT) currently paid by firms at 16.99% (inclusive of surcharge and education cess] of the dividend amount so declared, distributed or paid. With the grossing up [as per Finance Bill, 2014, dividend paid is grossed up with income distributed for computing DDT), the effective tax rate is even higher at 20.47%. The policy in regard to tax on dividend income had a chequered history with...
More
No comments
Aadhaar – key to plugging leakages in welfare schemes
On March 11, 2016, the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 was passed by the Lok Sabha [LS]. In the following week, the Bill was returned by the Rajya Sabha [RS] with five key amendments, but these were turned down and the LS passed it as a Money Bill. The Aadhaar Bill plans to use the identification number issued by the Unique Identification Authority of India (UIDAI), to deliver State subsidies directly into the hands (or actually, bank accounts) of beneficiaries. Aadhaar was first mooted as the Indian equivalent to the Social Security Number in the US. Aadhaar isn’t compulsory yet. The Bill is careful in stating that every resident is ‘entitled’ to...
More
No comments
PSB woes – lasting solution miles away
India is the only bright spot with a high growth rate of around 7.5% in an otherwise turbulent world with major economies either decelerating or remaining flat. But, there is a dark spot on Indian economic landscape which if not removed urgently, could prove to be a major drag. This pertains to increase in non-performing assets [NPAs] of banks to unsustainable level. Currently, NPAs [loans which do not yield return] of Indian banks are about Rs 400,000 crores. Including restructured assets [bad loans made to look like normal assets by relaxing terms], the total stressed assets are Rs 800,000 crores or 11.25% of gross advances. For public sector banks [PSBs] alone, this is much higher at 14%. The problem has...
More
No comments
2016-17 – budget that helps poor earn decent living
The Union Budget for 2016-17 presented the finance minister, Arun Jaitely on February 29, 2016 carries the imprint of prime minister Modi’s unflinching and genuine commitment to ameliorate the conditions of millions of poor – engaged in farming and other occupations – by creating all right conditions to enable them do productive work and earn good income. Driven by latter’s pledge to double farmers income by 2022 [75th year of Independence], the former has unveiled a plethora of initiatives/steps to bring about a structural transformation in the way farming is conducted and agricultural produce is marketed. Boost to farmers income & rural employment The measures that will enhance farmer’s capability to increase yield include a mammoth capital spend of Rs...
More
No comments
I-T reminder to Vodafone – Is tax terrorism back?
The income tax [I-T] department has sent a reminder notice to UK-based Vodafone Group Plc to pay Rs 14,300 crores in tax dues and threatened to seize the assets in case of non-payment. The revenue secretary, Hasmukh Adhia has described the notice as routine exercise of sending collection notices to all those whose dues are not stayed by any court. The party can always approach assessing office with a request to stay the demand as per the law. In case, the assessing officer does not agree, party can go to the next higher authority and get a stay. Despite the clarification, foreign investors have taken umbrage to the notice and even opined that this is the return of tax terrorism,...
More
No comments