Shshank Saurav’s book, Anatomy of Black Money, is a good read for all those who want to get a sense of how cheats are defrauding India of its limited resources without getting lost in financial jargon, writes Uttam Gupta There is an inherent tendency among criminals and other dubious operators to conceal income generated from illegal activities such as smuggling, drug trafficking, proceeds of corruption in public offices etc from the eyes of the Government and its agencies whom they have reason to fear. However, people tend to hide even income earned from legitimate sources with the sole intent of avoiding payment of tax or any other levies such as stamp duty, registration charges, market fee etc. The income concealed...
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Category: Economic outlook
The Air India sale : Better late than never
Persistent neglect of Air India for over a decade and even during the period when its sale was under consideration has cost the exchequer dear On June 28, 2017, the then Finance Minister, the late Arun Jaitely, had announced the ‘in-principle’ decision of the Union Cabinet for strategic divestment of Air India (AI) and five of its subsidiaries. Over 50 months there after, on September 8, 2021, the Government has informed about its decision to privatise AI and its 100 percent subsidiary, Air India Express Limited (AIEL) and its 51 percent share in Air India Air Transport Services Limited (AIATSL). The iconic Maharajahas gone back to the hangar of the Tata Group almost 68 years after the company was nationalized...
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Air India sale – better late than never
On June 28, 2017, the then Finance Minister, Arun Jaitely had announced the ‘in-principle’ decision of the Union Cabinet for strategic divestment of Air India (AI) and five of its subsidiaries. Over 50 months thereafter, on September 8, 2021, the Government has informed about it decision to privatize AI and its 100 percent subsidiary namely Air India Express Limited (AIEL) and its 51 percent share in Air India Air Transport Services Limited (AIATSL). The iconic Maharaja – as the airlines is nicknamed – has gone back to the hangar of Tata Group almost 68 years after the company was nationalized in 1953. The AI privatization saga reveals four major pitfalls. First, the move has been half hearted from the day one. This...
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Banks’ bailout — Make it transparent
The proposed ‘bad bank’ scheme by the Government is merely an attempt at using taxpayers’ money for bailing out NPA-afflicted banks In the Union Budget for 2021-22, Finance Minister Nirmala Sitharaman had proposed setting up of a bad bank. Crafted as National Asset Reconstruction Company Limited (NARCL), it will bundle up all the non-performing assets (NPAs) of banks and sell them to investors such as private equity funds, alternative investment funds (AIFs) and so on, by putting a turnaround plan in place. On September 16, 2021, she announced the broad contours of the action plan. Under it, the NARCL will purchase NPAs from banks under 15:85 structure, wherein it will pay up to 15 per cent of the agreed or...
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Banks bail out – make it transparent
In the Union Budget for 2021-22, Finance Minister Nirmala Sitharaman had proposed setting up of a bad bank. Crafted as National Asset Reconstruction Company Limited (NARCL), it will bundle up all the non-performing assets (NPAs) of banks and sell them to investors such as private equity funds, alternative investment funds (AIFs) and so on, by putting a turnaround plan in place. On September 16, 2021, she announced the broad contours of the action plan. Under it, the NARCL will purchase NPAs from banks under 15:85 structure, wherein it will pay up to 15% of the agreed/discounted value of the loans in cash and issue Security Receipts (SRs) for the rest. The Government will provide sovereign guarantee – valid for a...
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Asset monetisation: Will it take off?
The biggest bottleneck is the cumbersome procedures involved in striking such deals and the accompanying bureaucratic red tape In her maiden budget presented to Parliament on in 2019, Finance Minister Nirmala Sitharaman laid a roadmap for catapulting the Indian economy to $5 trillion by 2024-25, its most crucial component being investment in infrastructure to the tune of a mammoth Rs 100,00,000 crore ($1.4 trillion) over a period of five years. Thirty-nine per cent each of this amount was to come from the Centre and States and the balance from the private sector. The Centre’s contribution works out to around Rs 40,00,000 crore over five years or Rs 800,000 crore per annum. Against this, the revised estimate (RE) for capital expenditure...
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Asset monetization – will it take off
In her maiden budget presented to Parliament on July 5, 2019, Finance Minister Nirmala Sitharaman laid a roadmap for catapulting the Indian economy to $5 trillion by 2024-25, its most crucial component being investment in infrastructure to the tune of a mammoth Rs 100,00,000 crore (US$1.4 trillion) over a period of five years (read: 2020-21 to 2024-25). As for funding, 39% of this amount was to come from the Union Government and States each and the balance 22% from the private sector. The Centre’s contribution at 39% works out to around Rs 40,00,000 crore over 5 years or Rs 800,000 crore per annum. Against this, the revised estimate (RE) for capital expenditure during 2020-21 was Rs 439,000 crore. Even assuming...
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Shun duopoly in telecom industry
The real problems are the policies and regulatory environment that have favoured one player even while targeting others Telecom operators including Airtel, Vodafone Idea or Vi and Reliance Jio have submitted a charter of demands to the Centre. They primarily relate to licence fees: reducing the license fee from three per cent of adjusted gross revenue (AGR) to one per cent, USOF (Universal Service Obligation Fund) contribution from five per cent of AGR to one per cent, spectrum usage charge (SUC) from 3-6 per cent (depending on when the operator acquired spectrum in respective bands) to a uniform three per cent for all operators, A demand is also to extend the tenure of leased spectrum to operators from 20 years...
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Telecom industry – shun duopoly
In a letter addressed to the department of telecommunication (DoT), the telecom operators including the three major players viz. Airtel, Vodafone Idea or Vi and Reliance Jio have submitted a charter of demands. These include:- (i) reduce the license fee from 3% of adjusted gross revenue (AGR) to 1%, USOF (Universal Service Obligation Fund) contribution from 5% of AGR to 1%, spectrum usage charge (SUC) from 3-6% (depending on when the operator acquired spectrum in respective bands) to a uniform 3% for all operators; (ii) extend the tenure of leased spectrum to operators from 20 years to 40 years; (iii) moratorium of 7-10 years for payments (in addition to 2 years already given); (iv) reduce interest rate on all outstanding...
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Fuels under GST: Illogical proposition
Given the yawning gap between the existing tax rate and the maximum that can be levied under GST (28%), the shifting of fuels to the new regime is impractical In a recent discussion with economists and industry experts on transition of energy products into the Goods and Services Tax (GST),NITI Aayog proposed a formula for bringing two motor fuels, petrol and diesel, besides electricity under the new regime. Under it, the Centre could keep the two fuels in the highest slab of 28 per cent and electricity in the 18 per cent slab. To compensate states for the loss of revenue resulting from the shift to the GST dispensation – fully in case of electricity and partially for petrol and...
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