General Affairs
India renews call for UN action against Lashkar-e-Toiba, Jaish-e-Mohammed, their supporters
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India has renewed its demand for international action against Lashkar-e-Toiba (LeT) and the Jaish-e-Mohammed (JeM) and “their shadowy supporters”. Denouncing the two organisations, whose leadership is based in Pakistan, as affiliates of al-Qaida, India’s Permanent Representative Syed Akbaruddin told the Security Council that it was imperative to take action against the support they get from outside.
In an implied criticism of China, he blamed the “split” in the UN bodies that mete out sanctions on terrorist organisations for the world body’s inability to deal with the terrorism.
China has blocked India’s efforts to have international sanctions imposed on Pakistan-based JeM chief Masood Azhar by a committee that takes action against al-Qaida and its affiliates. Azhar was behind the attack on the Pathankot air force base this year. As a member of the Security Council, China has also provided cover for Pakistan releasing on bail Zaki-ur-Rehman Lakhvi, the LeT commander who masterminded the 2008 attack on Mumbai which killed more than 160 people. He was already on the UN list of those facing sanctions as terrorists.
India has renewed its demand for international action against Lashkar-e-Toiba (LeT) and the Jaish-e-Mohammed (JeM) and “their shadowy supporters”. Denouncing the two organisations, whose leadership is based in Pakistan, as affiliates of al-Qaida, India’s Permanent Representative Syed Akbaruddin told the Security Council that it was imperative to take action against the support they get from outside.
In an implied criticism of China, he blamed the “split” in the UN bodies that mete out sanctions on terrorist organisations for the world body’s inability to deal with the terrorism.
China has blocked India’s efforts to have international sanctions imposed on Pakistan-based JeM chief Masood Azhar by a committee that takes action against al-Qaida and its affiliates. Azhar was behind the attack on the Pathankot air force base this year. As a member of the Security Council, China has also provided cover for Pakistan releasing on bail Zaki-ur-Rehman Lakhvi, the LeT commander who masterminded the 2008 attack on Mumbai which killed more than 160 people. He was already on the UN list of those facing sanctions as terrorists.
Demonetisation: Pakistan, Venezuela unwilling to go the whole way like Modi on note ban
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Despite the immense hardships faced by people across India, Prime Minister Narendra Modi’s demonetisation move appears to be popular, at least politically. It has been echoed in at least two other developing countries, where Venezuela and Pakistan have taken a similar route.
Last weekend, Venezuela’s President Nicolas Maduro took the decision of scrapping 48 per cent of the country’s currency by withdrawing the 100 bolivar bill. Like Modi, who informed India that the step was taken not only to weed out black money, but to also falter the functioning of terrorists, Maduro told his citizens that the drastic measure was taken to circumvent Venezuela’s inflation (IMF made a forecast of it hitting 475 per cent this year), while also battling the transnational mafias breeding in the country.
However, in contrast to the four hours India was given to spend its old notes, the Venezuelan government gave its people a period of three days to use the 100 bolivar notes. In addition, the people were given merely 10-day window to transfer their money into their bank accounts, while the Indian government had given its people 50 days.
Like India, the result was inevitable: Venezuela plunged into chaos. Unlike India however, the people’s response to the move was different. Maduro is no Modi. Almost immediately, protesters in Venezuela blitzkrieged the streets, destroying shops, blocking roads, breaking down ATM machines and wrecking havoc. The mood of the crowd was angry, intense, and unified.
Remarkably in India, despite the move that has slowed down our economy and broken the backbone of the agricultural sector in particular, no one is protesting. Indians are known to protest. It’s in our blood. If something doesn’t sit well with us, we raise an alarm. Of course, there have been pockets of disruption: there was the nation-wide protest under the banner of ‘Jan Aakrosh Diwas’ for instance, which unfortunately failed to make an impact. The reason for that protest to fizzle out, however, was that the politically-led protests in different parts of the subcontinent weren’t unified in voice and spirit. They had their own agendas in place. Not many wanted to join hands and fight for a united cause.
The mild murmur of protests could possibly be linked to people’s inhibition to display any form of disagreement with the government. Demonetisation has been intelligently paired with the anti-national narrative: if anyone questions or challenges the move, he/she is unpatriotic and possibly in possession of black money. There are many who, therefore, refuse to speak out because of the overwhelming fear of being attacked for voicing dissent.
Today, Pakistan announced that it would cull Rs 5000 notes from circulation. Out of the 3.4 trillion notes in circulation, 1.02 trillion –about a third — are in this high value. It’s therefore, not as drastic a step as the one taken by Modi who withdrew over 86 per cent of the currency. Modi did not take the issue to Parliament to maintain secrecy. Pakistan in comparison, approached the Senate before announcing the decision. In November, Pakistan had also publicly declared that these notes will be devalued. This makes the whole move less severe, less messy, and strategically, better planned. Unlike India, Pakistan’s move seems to be taken cautiously, possibly wary of the crippling consequences India is experiencing right now. It has decided to spread out demonetisation over a period of three to five years, slowly pulling out the notes “in a phased manner”.
Interestingly, Venezuela’s President has temporarily stalled the decision to demonetise the economy, particularly after the protests and the death that was reported. There are a few who commend him, saying that unlike Modi who refuses to acknowledge the issues and retract demonetisation, at least Maduro is paying attention to the mood of the people. However, there are others who’ve argued that President Maduro is an unpopular leader, and the fear of being ousted through a military coup was probably what prompted him to pull back the note ban.
Historically,Venezuela has been marred by series of coups where political leaders have been uninhibitedly overthrown. For instance in 2002, Venezuelan President Huga Chavez was removed from power by a military coup, leading to the annulment of the country’s constitution. Pedro Carmona, a business leader replaced him. Prior to that, Venezuela has witnessed several military coups – 1945, 1948, 958 – that have seen Presidents being overthrown.
In comparison to Maduro, Modi enjoys immense popularity. Over the years, he has been able to build a strong image of himself, where a majority of the country believes he heads a “transparent” government and has great decision-making skills. So even though demonetisation has led to numerous deaths; even though economists predict the National GDP will plummet by two percent (which they call an under-estimation), the idea to publicly overthrow him, replace him or denounce him, seems unthinkable.
Therefore, while Maduro may have withdrawn demonetisation because of political threats, Modi will be unwilling to do so. It will be a political suicide if he even considers it, some argue. When Modi announced the note ban on November 8, he asked the citizens to invest faith in him. If he appears to falter in his decision now, it will collapse the awe-inspiring image he has skillfully built over the years. What’s more disconcerting is government calling the numerous deaths in the country and other inconveniences caused by demonetisation as “temporary pain for larger gain”. Of course all of us have been told what the so-called ‘larger gain’ is, but there is no certainty whether it will be achieved.
Despite the immense hardships faced by people across India, Prime Minister Narendra Modi’s demonetisation move appears to be popular, at least politically. It has been echoed in at least two other developing countries, where Venezuela and Pakistan have taken a similar route.
Last weekend, Venezuela’s President Nicolas Maduro took the decision of scrapping 48 per cent of the country’s currency by withdrawing the 100 bolivar bill. Like Modi, who informed India that the step was taken not only to weed out black money, but to also falter the functioning of terrorists, Maduro told his citizens that the drastic measure was taken to circumvent Venezuela’s inflation (IMF made a forecast of it hitting 475 per cent this year), while also battling the transnational mafias breeding in the country.
However, in contrast to the four hours India was given to spend its old notes, the Venezuelan government gave its people a period of three days to use the 100 bolivar notes. In addition, the people were given merely 10-day window to transfer their money into their bank accounts, while the Indian government had given its people 50 days.
Like India, the result was inevitable: Venezuela plunged into chaos. Unlike India however, the people’s response to the move was different. Maduro is no Modi. Almost immediately, protesters in Venezuela blitzkrieged the streets, destroying shops, blocking roads, breaking down ATM machines and wrecking havoc. The mood of the crowd was angry, intense, and unified.
Remarkably in India, despite the move that has slowed down our economy and broken the backbone of the agricultural sector in particular, no one is protesting. Indians are known to protest. It’s in our blood. If something doesn’t sit well with us, we raise an alarm. Of course, there have been pockets of disruption: there was the nation-wide protest under the banner of ‘Jan Aakrosh Diwas’ for instance, which unfortunately failed to make an impact. The reason for that protest to fizzle out, however, was that the politically-led protests in different parts of the subcontinent weren’t unified in voice and spirit. They had their own agendas in place. Not many wanted to join hands and fight for a united cause.
The mild murmur of protests could possibly be linked to people’s inhibition to display any form of disagreement with the government. Demonetisation has been intelligently paired with the anti-national narrative: if anyone questions or challenges the move, he/she is unpatriotic and possibly in possession of black money. There are many who, therefore, refuse to speak out because of the overwhelming fear of being attacked for voicing dissent.
Today, Pakistan announced that it would cull Rs 5000 notes from circulation. Out of the 3.4 trillion notes in circulation, 1.02 trillion –about a third — are in this high value. It’s therefore, not as drastic a step as the one taken by Modi who withdrew over 86 per cent of the currency. Modi did not take the issue to Parliament to maintain secrecy. Pakistan in comparison, approached the Senate before announcing the decision. In November, Pakistan had also publicly declared that these notes will be devalued. This makes the whole move less severe, less messy, and strategically, better planned. Unlike India, Pakistan’s move seems to be taken cautiously, possibly wary of the crippling consequences India is experiencing right now. It has decided to spread out demonetisation over a period of three to five years, slowly pulling out the notes “in a phased manner”.
Interestingly, Venezuela’s President has temporarily stalled the decision to demonetise the economy, particularly after the protests and the death that was reported. There are a few who commend him, saying that unlike Modi who refuses to acknowledge the issues and retract demonetisation, at least Maduro is paying attention to the mood of the people. However, there are others who’ve argued that President Maduro is an unpopular leader, and the fear of being ousted through a military coup was probably what prompted him to pull back the note ban.
Historically,Venezuela has been marred by series of coups where political leaders have been uninhibitedly overthrown. For instance in 2002, Venezuelan President Huga Chavez was removed from power by a military coup, leading to the annulment of the country’s constitution. Pedro Carmona, a business leader replaced him. Prior to that, Venezuela has witnessed several military coups – 1945, 1948, 958 – that have seen Presidents being overthrown.
In comparison to Maduro, Modi enjoys immense popularity. Over the years, he has been able to build a strong image of himself, where a majority of the country believes he heads a “transparent” government and has great decision-making skills. So even though demonetisation has led to numerous deaths; even though economists predict the National GDP will plummet by two percent (which they call an under-estimation), the idea to publicly overthrow him, replace him or denounce him, seems unthinkable.
Therefore, while Maduro may have withdrawn demonetisation because of political threats, Modi will be unwilling to do so. It will be a political suicide if he even considers it, some argue. When Modi announced the note ban on November 8, he asked the citizens to invest faith in him. If he appears to falter in his decision now, it will collapse the awe-inspiring image he has skillfully built over the years. What’s more disconcerting is government calling the numerous deaths in the country and other inconveniences caused by demonetisation as “temporary pain for larger gain”. Of course all of us have been told what the so-called ‘larger gain’ is, but there is no certainty whether it will be achieved.
CBSE recommends making Board exams for Class X mandatory
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Board exams for Class X are set to become compulsory for all CBSE students from 2018 as CBSE’s Governing body on Tuesday “unanimously approved” a proposal in this regard. At the meeting of the Governing body, its members agreed that from the academic session 2017-18, compulsory Board exams should be introduced for all students of Class X, sources said. The decision will now have to be approved by the government before it is implemented. Currently, it is optional for CBSE students to choose either the Board exam or a school-based examination.
HRD Minister Prakash Javadekar has in the past favoured making Board exam compulsory for CBSE students as is the practice in all state boards. The sources said while there is a view that for the Class X Board exams, 80 percent weightage will be given to the marks scored in examinations while 20 percent weightage will be given to school-based evaluation.
In another key decision, the CBSE has decided to recommend to the HRD ministry that the three language formula, under which Hindi, English and modern Indian language are taught, should be extended to class IX and X as well from the current VI to VIII, a source said.
Officials added that the Board also favoured sending a recommendation to the Centre that those languages which are listed in schedule VIII of the Constitution should be taught under the ‘Three language formula’ while languages which are “purely foreign” should be taught as a “fourth language as an elective subject.”
In the past the HRD ministry run Kendriya Vidyalayas (KV) used to offer German as a third language, but the practice was later discontinued. The final call on these decisions will be taken by the government, a senior official said.
Board exams for Class X are set to become compulsory for all CBSE students from 2018 as CBSE’s Governing body on Tuesday “unanimously approved” a proposal in this regard. At the meeting of the Governing body, its members agreed that from the academic session 2017-18, compulsory Board exams should be introduced for all students of Class X, sources said. The decision will now have to be approved by the government before it is implemented. Currently, it is optional for CBSE students to choose either the Board exam or a school-based examination.
HRD Minister Prakash Javadekar has in the past favoured making Board exam compulsory for CBSE students as is the practice in all state boards. The sources said while there is a view that for the Class X Board exams, 80 percent weightage will be given to the marks scored in examinations while 20 percent weightage will be given to school-based evaluation.
In another key decision, the CBSE has decided to recommend to the HRD ministry that the three language formula, under which Hindi, English and modern Indian language are taught, should be extended to class IX and X as well from the current VI to VIII, a source said.
Officials added that the Board also favoured sending a recommendation to the Centre that those languages which are listed in schedule VIII of the Constitution should be taught under the ‘Three language formula’ while languages which are “purely foreign” should be taught as a “fourth language as an elective subject.”
In the past the HRD ministry run Kendriya Vidyalayas (KV) used to offer German as a third language, but the practice was later discontinued. The final call on these decisions will be taken by the government, a senior official said.
Arun Jaitley says railway services must be paid for, populism can’t be measure of success
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Weeks before he presents India’s first combined general and railway budget, Finance Minister Arun Jaitley today said rail commuters must pay for the service they receive even as he made a strong case for outsourcing of non-core functions like hospitality services. He said year after year, the success of Railway Budget was measured by subsidising consumers and making populist announcements regarding trains.
“Railways got caught in a battle where populism prevailed over performance and the basic principle on which any commercial establishment is to be run, the first essential principle is that consumers must pay for the services that they receive,” he said. Speaking at a conference on Accounting Reforms in Railways organised by CII, Jaitley said unless the railways strengthen its performance and internal management system, they will lose out to competition from other sectors like highways and airlines in passenger and cargo transportation.
“The core competence of railways is really to drive trains, to provide those services. Hospitality may not be the core competence of the railways and therefore, what is not within its core competence, the principle of outsourcing — which is accepted world over — can be a logical addition to those activities of railways,” Jaitley said. Citing example of power and highway sectors which started doing well only after consumers paid for services they got, Jaitley said worldover, only those services have succeeded where there is a financial model which says that consumers pay for what they receive.
” (But)We turned this whole theory upside down by a self imposed indiscipline that populism requires that I require that consumers not to pay for service that they receive. Therefore any establishment will start crumbling in its own weight and contradictions,” he said. The government had in September scrapped the 92-year old practice of presenting a separate railway budget and decided to present a combined general and railway budget for 2017-18 on February 1, 2017.
Speaking at a conference on Accounting Reforms in Railways organised by CII, Jaitley said that the shift towards accrual system of accounting from cash system will better reflect its performance. “Your accounting systems really must reveal more instead of concealing the reality. What is the kind of investment in infrastructure that is coming in, what is the kind of investment in railway safety, what is the kind of outcome of outlay that you have planned, I think those accounts must really reflect the reality,” he said.
Weeks before he presents India’s first combined general and railway budget, Finance Minister Arun Jaitley today said rail commuters must pay for the service they receive even as he made a strong case for outsourcing of non-core functions like hospitality services. He said year after year, the success of Railway Budget was measured by subsidising consumers and making populist announcements regarding trains.
“Railways got caught in a battle where populism prevailed over performance and the basic principle on which any commercial establishment is to be run, the first essential principle is that consumers must pay for the services that they receive,” he said. Speaking at a conference on Accounting Reforms in Railways organised by CII, Jaitley said unless the railways strengthen its performance and internal management system, they will lose out to competition from other sectors like highways and airlines in passenger and cargo transportation.
“The core competence of railways is really to drive trains, to provide those services. Hospitality may not be the core competence of the railways and therefore, what is not within its core competence, the principle of outsourcing — which is accepted world over — can be a logical addition to those activities of railways,” Jaitley said. Citing example of power and highway sectors which started doing well only after consumers paid for services they got, Jaitley said worldover, only those services have succeeded where there is a financial model which says that consumers pay for what they receive.
” (But)We turned this whole theory upside down by a self imposed indiscipline that populism requires that I require that consumers not to pay for service that they receive. Therefore any establishment will start crumbling in its own weight and contradictions,” he said. The government had in September scrapped the 92-year old practice of presenting a separate railway budget and decided to present a combined general and railway budget for 2017-18 on February 1, 2017.
Speaking at a conference on Accounting Reforms in Railways organised by CII, Jaitley said that the shift towards accrual system of accounting from cash system will better reflect its performance. “Your accounting systems really must reveal more instead of concealing the reality. What is the kind of investment in infrastructure that is coming in, what is the kind of investment in railway safety, what is the kind of outcome of outlay that you have planned, I think those accounts must really reflect the reality,” he said.
Centre rushes 4,000 paramilitary personnel to Manipur
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The Centre has rushed around 4,000 paramilitary personnel to Manipur in the wake of violence following economic blockade on National Highways connecting the state. While around 1,500 paramilitary personnel were rushed in to Manipur in last two days, around 2,500 paramilitary were dispatched to the state last week, a senior Home Ministry official said on Tuesday.
The security personnel were sent to the Northeastern state keeping in view the security situation in the state in the wake of violence following the economic blockade imposed by the Union Naga Council on two National Highways since November 1. The UNC has imposed the economic blockade on NH-2 (Imphal-Dimapur) and NH 37 (Imphal-Jiribam) that serve as lifelines for the landlocked Manipur. Curfew in Imphal East district was clamped indefinitely on Sunday last after a mob torched and vandalised 22 passenger vehicles on the Imphal-Ukhrul road, while curfew in Imphal West district was imposed from evening to dawn.
Nagaland Chief Minister T R Zeliang has sought the intervention of both the Centre and Manipur government in securing the lives and property of Naga people in the Imphal valley of Manipur. Zeliang in separate letters to Union Home Minister Rajnath Singh and Manipur Chief Minister Ibobi Singh yesterday drew their attention to the plight of hundreds of Nagas who are stranded in the Imphal valley and claimed that they were prevented from proceeding to their respective villages in the hills after threats to their lives by some valley based organisations.
The security personnel were sent to the Northeastern state keeping in view the security situation in the state in the wake of violence following the economic blockade imposed by the Union Naga Council on two National Highways since November 1. The UNC has imposed the economic blockade on NH-2 (Imphal-Dimapur) and NH 37 (Imphal-Jiribam) that serve as lifelines for the landlocked Manipur. Curfew in Imphal East district was clamped indefinitely on Sunday last after a mob torched and vandalised 22 passenger vehicles on the Imphal-Ukhrul road, while curfew in Imphal West district was imposed from evening to dawn.
Nagaland Chief Minister T R Zeliang has sought the intervention of both the Centre and Manipur government in securing the lives and property of Naga people in the Imphal valley of Manipur. Zeliang in separate letters to Union Home Minister Rajnath Singh and Manipur Chief Minister Ibobi Singh yesterday drew their attention to the plight of hundreds of Nagas who are stranded in the Imphal valley and claimed that they were prevented from proceeding to their respective villages in the hills after threats to their lives by some valley based organisations.
Business Affairs
Sensex extends losses, down 81 points on weak Asian cues
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Falling for the fourth straight session, the benchmark BSE Sensex surrendered another 81 points to quote at 26,408.74 in early trade today on sustained selling by investors and funds amid weak Asian cues. The 30-share barometer was down 80.82 points, or 0.31 per cent, to 26,408.74 in early trade, with sectoral indices led by consumer durables, auto, realty and banking trading lower.
The index had lost 208.26 points in previous three sessions. The NSE Nifty dropped 25.20 points, or 0.30 per cent, to 8,114.25.
Brokers said apart from continued outflows by foreign funds, a weak trend in Asia tracking a sell-off on Wall Street and extending last week’s losses on concerns of an expected jump in US interest rates next year mainly pulled the indices down.
Japan’s Nikkei fell 0.22 per cent while Hong Kong’s Hang Seng shed 0.84 per cent in early trade today. Shanghai Composite too shed 0.19 per cent. The Dow Jones Industrial Average ended 0.04 per cent lower in Friday’s trade.
Falling for the fourth straight session, the benchmark BSE Sensex surrendered another 81 points to quote at 26,408.74 in early trade today on sustained selling by investors and funds amid weak Asian cues. The 30-share barometer was down 80.82 points, or 0.31 per cent, to 26,408.74 in early trade, with sectoral indices led by consumer durables, auto, realty and banking trading lower.
The index had lost 208.26 points in previous three sessions. The NSE Nifty dropped 25.20 points, or 0.30 per cent, to 8,114.25.
Brokers said apart from continued outflows by foreign funds, a weak trend in Asia tracking a sell-off on Wall Street and extending last week’s losses on concerns of an expected jump in US interest rates next year mainly pulled the indices down.
Japan’s Nikkei fell 0.22 per cent while Hong Kong’s Hang Seng shed 0.84 per cent in early trade today. Shanghai Composite too shed 0.19 per cent. The Dow Jones Industrial Average ended 0.04 per cent lower in Friday’s trade.
Arun Jaitley asks banks to think ‘out-of-box’ while doing business
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Finance Minister Arun Jaitley on Tuesday nudged banks to think “out-of-box” while doing business and dealing with challenges, even as state-owned banks sought higher capital support from the government and tax incentives for senior citizens parking money in fixed deposits. In their customary pre-budget meeting with Jaitley, bankers sought full tax exemption for NPA provisioning in view their profitability and demanded a Central Registry for GST registration for banks having branches across the country.
“The current Financial Year is not a conventional year as many major reformative decisions have been taken during the year. There is need for out of box thinking as series of steps are required about what the Government can do and what the banks can do,” Jaitley said during the meeting.
Stating that the banking sector is the backbone of our economy, Jaitley said he “does not see any serious challenges as far as structural changes are concerned”.
PSU banks on their part suggested that there is need for recapitalisation of banks in the current financial year as well as in the next Financial Year 2017-18. “Post-demonetisation, liquidity in banks has improved. This may impact saving deposit rates. This makes senior citizens more vulnerable as their income is adversely affected. So, some sort of exemption need to be given to them under the Income Tax Act so that they have a decent income through their deposits,” the banks demanded.
Pitching for incentives for digital transaction infrastructure, bankers suggested that there is need for exempting Banking Correspondents transactions from service tax. It was informed that the overall mood about demonetisation in rural areas, including among farmers, is largely positive.
However, four sectors need special attention. These includes vegetable growers who depend on cash for their day to day dealings and cannot hold their crop for long as it is perishable, transport industry in rural India, and plantations in South.
It was suggested that there is urgent need for special efforts for digitisation of Primary Agriculture Cooperative Societies, Regional Rural Banks and Cooperative Banks to promote digital transactions and e-payments.
Emphasising that dairy sector has huge potential for employment generation, creation a new Dairy Infrastructure Development Fund for the purpose was suggested.
Pitching for use of latest technology in agri sector, bankers also suggested that a Krishi Udyam Nidhi be created for giving a boost to sector-related start-ups and IT applications. It was also suggested that NABARD also need capitalization of worth Rs 2,500 crore.
After demonetisation, the Budget should focus on boosting the consumption to create demand, bankers demanded.
Finance Bill should mandate that all wages should be paid by the employers through banking channel or digital mode and Urban Local Bodies should be encouraged to collect Property Tax through online means, bankers suggested.
To further incentivise digitial payment, it was suggested that there is need to give some tax rebate to shopkeepers and consumers if they use digital means more than a certain amount. Citing some of challenges, bankers also pointed out that micro finance sector has seen a little increase in default as most of the people pay in cash and also in SME sector are waiting for the withdrawal limits to be raised to start paying their workers.
Axis Bank representative specifically listed out steps taken by the bank’s management against some erring officials and assured the Finance Minister that as a bank, they are fully committed to compliance of banking and government prescribed norms and standards.
To boost demand in the economy, bankers also said that low cost housing needs to be encouraged and ownership of a plot or land is required to avail finance for housing.
With regard to improving internet connectivity, it was suggested that each district may be allotted to a particular telecom company to improve internet connectivity.
Mutual Funds and Life Insurance Companies provide employment to a large number of youths through their distribution network, it was suggested that some sort of incentive should be given to them.
To fight unemployment, bankers suggested that a provision should be made that if a firm, that employ a certain number of people, increases the number of jobs by a certain degree, then 2-3 per cent tax relaxation would be given to it.
As far as the Government’s Financial Inclusion drive is concerned, a Venture Fund for members of Scheduled Caste was launched with Rs 200 crore.
Under this, it was informed that 71 proposals have been screened so far. So the Government should continue to provide Rs 200 crore more in next budget. And a similar fund for STs should also be created.
Later in day, Jaitley met economists who believed to have shared their view on impact of demonetisation on economy, inflation and higher governmnent spending in various sector.
Finance Minister Arun Jaitley on Tuesday nudged banks to think “out-of-box” while doing business and dealing with challenges, even as state-owned banks sought higher capital support from the government and tax incentives for senior citizens parking money in fixed deposits. In their customary pre-budget meeting with Jaitley, bankers sought full tax exemption for NPA provisioning in view their profitability and demanded a Central Registry for GST registration for banks having branches across the country.
“The current Financial Year is not a conventional year as many major reformative decisions have been taken during the year. There is need for out of box thinking as series of steps are required about what the Government can do and what the banks can do,” Jaitley said during the meeting.
Stating that the banking sector is the backbone of our economy, Jaitley said he “does not see any serious challenges as far as structural changes are concerned”.
PSU banks on their part suggested that there is need for recapitalisation of banks in the current financial year as well as in the next Financial Year 2017-18. “Post-demonetisation, liquidity in banks has improved. This may impact saving deposit rates. This makes senior citizens more vulnerable as their income is adversely affected. So, some sort of exemption need to be given to them under the Income Tax Act so that they have a decent income through their deposits,” the banks demanded.
Pitching for incentives for digital transaction infrastructure, bankers suggested that there is need for exempting Banking Correspondents transactions from service tax. It was informed that the overall mood about demonetisation in rural areas, including among farmers, is largely positive.
However, four sectors need special attention. These includes vegetable growers who depend on cash for their day to day dealings and cannot hold their crop for long as it is perishable, transport industry in rural India, and plantations in South.
It was suggested that there is urgent need for special efforts for digitisation of Primary Agriculture Cooperative Societies, Regional Rural Banks and Cooperative Banks to promote digital transactions and e-payments.
Emphasising that dairy sector has huge potential for employment generation, creation a new Dairy Infrastructure Development Fund for the purpose was suggested.
Pitching for use of latest technology in agri sector, bankers also suggested that a Krishi Udyam Nidhi be created for giving a boost to sector-related start-ups and IT applications. It was also suggested that NABARD also need capitalization of worth Rs 2,500 crore.
After demonetisation, the Budget should focus on boosting the consumption to create demand, bankers demanded.
Finance Bill should mandate that all wages should be paid by the employers through banking channel or digital mode and Urban Local Bodies should be encouraged to collect Property Tax through online means, bankers suggested.
To further incentivise digitial payment, it was suggested that there is need to give some tax rebate to shopkeepers and consumers if they use digital means more than a certain amount. Citing some of challenges, bankers also pointed out that micro finance sector has seen a little increase in default as most of the people pay in cash and also in SME sector are waiting for the withdrawal limits to be raised to start paying their workers.
Axis Bank representative specifically listed out steps taken by the bank’s management against some erring officials and assured the Finance Minister that as a bank, they are fully committed to compliance of banking and government prescribed norms and standards.
To boost demand in the economy, bankers also said that low cost housing needs to be encouraged and ownership of a plot or land is required to avail finance for housing.
With regard to improving internet connectivity, it was suggested that each district may be allotted to a particular telecom company to improve internet connectivity.
Mutual Funds and Life Insurance Companies provide employment to a large number of youths through their distribution network, it was suggested that some sort of incentive should be given to them.
To fight unemployment, bankers suggested that a provision should be made that if a firm, that employ a certain number of people, increases the number of jobs by a certain degree, then 2-3 per cent tax relaxation would be given to it.
As far as the Government’s Financial Inclusion drive is concerned, a Venture Fund for members of Scheduled Caste was launched with Rs 200 crore.
Under this, it was informed that 71 proposals have been screened so far. So the Government should continue to provide Rs 200 crore more in next budget. And a similar fund for STs should also be created.
Later in day, Jaitley met economists who believed to have shared their view on impact of demonetisation on economy, inflation and higher governmnent spending in various sector.
Sri Lanka Finance Minister Ravi Karunanayake sees stable rupee in 2017
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Sri Lankan Finance Minister Ravi Karunanayake said on Tuesday the rupee currency, which is under downward pressure, will recover and be steady next year with expected foreign inflows.
The rupee, which has fallen 3 percent this year after a nearly 10 percent loss in 2015, is under pressure because of higher imports and foreign outflows from government securities even though the central bank has raised key policy rates by 100 basis points since February.
The strengthening of the US currency globally after the Federal Reserve’s rate increase last week, and a lack of exporter dollar conversions, have also hurt the rupee, dealers say. “I am quite sure that we will see a reversal trend,” Karunanayake told Reuters in an interview at his office, citing expected strong foreign investment in 2017.
He did not elaborate on the expected foreign inflows next year. “This year was for things to get done because we have got such a perilous economy. People had lost confidence.”
Karunanayake, however, said a steady rupee could come at the cost of higher interest rates, though the efforts to ensure strong macroeconomic fundamentals could help to keep borrowing costs in check. “You can’t have it all. You can’t have the rupee strengthening and interest rates coming down,” he said, adding that the government would make a steady rupee a priority while economic policy would have its own impact on interest rates.
Since President Maithripala Sirisena’s new government came to power in January last year, the economy has faced a balance-of-payments and debt crisis, partly due to heavy, expensive borrowing under the previous government. The rupee reversed its downward trend after the International Monetary Fund (IMF) approved a $1.5 billion loan in June, but optimism soon evaporated due to lack of foreign inflows.
Under the IMF loan, Sri Lanka has committed to carrying out strong reforms for fiscal consolidation through higher tax revenues and minimising losses at state-owned enterprises.
The island nation is aiming for a budget deficit of 5.4 percent of gross domestic product (GDP) this year from last year’s 7.4 percent. It has targeted a deficit of 4.6 percent of GDP next year.
Sri Lankan Finance Minister Ravi Karunanayake said on Tuesday the rupee currency, which is under downward pressure, will recover and be steady next year with expected foreign inflows.
The rupee, which has fallen 3 percent this year after a nearly 10 percent loss in 2015, is under pressure because of higher imports and foreign outflows from government securities even though the central bank has raised key policy rates by 100 basis points since February.
The strengthening of the US currency globally after the Federal Reserve’s rate increase last week, and a lack of exporter dollar conversions, have also hurt the rupee, dealers say. “I am quite sure that we will see a reversal trend,” Karunanayake told Reuters in an interview at his office, citing expected strong foreign investment in 2017.
He did not elaborate on the expected foreign inflows next year. “This year was for things to get done because we have got such a perilous economy. People had lost confidence.”
Karunanayake, however, said a steady rupee could come at the cost of higher interest rates, though the efforts to ensure strong macroeconomic fundamentals could help to keep borrowing costs in check. “You can’t have it all. You can’t have the rupee strengthening and interest rates coming down,” he said, adding that the government would make a steady rupee a priority while economic policy would have its own impact on interest rates.
Since President Maithripala Sirisena’s new government came to power in January last year, the economy has faced a balance-of-payments and debt crisis, partly due to heavy, expensive borrowing under the previous government. The rupee reversed its downward trend after the International Monetary Fund (IMF) approved a $1.5 billion loan in June, but optimism soon evaporated due to lack of foreign inflows.
Under the IMF loan, Sri Lanka has committed to carrying out strong reforms for fiscal consolidation through higher tax revenues and minimising losses at state-owned enterprises.
The island nation is aiming for a budget deficit of 5.4 percent of gross domestic product (GDP) this year from last year’s 7.4 percent. It has targeted a deficit of 4.6 percent of GDP next year.
Demonetisation: Bihar govt pulls up banks for not opening branches
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The Bihar government Tuesday hinted that it may penalise banks by denying government deposits for not opening sufficient branches despite instructions of RBI to reduce people’s hardship on account of demonetisation.
“Such banks would be identified and instruction would be sent to Divisional Commissioners and District Magistrates to deprive them of government deposits,” state Finance Minister Abdul Bari Siddiqui said after a meeting with bankers.
“Direction to this effect would be issued to concerned departments soon,” he said in a statement.
Siddiqui, who presided over state-level bankers meeting regretted that out of an annual target to open 1640 new branches by December 15 this year, 35 commercial banks, rural banks and cooperative banks opened only 87 new branches.
He issued details of banks giving their performance on this count. State Bank of India which had to open 88 new branches could start only 32 branches. Central Bank of India did not open any new branch against the target of 83 while Punjab National Bank opened only 7 new branches against target of 83, he said.
Other major banks like Canara Bank, UCO bank and Bank of India drew nought against promised target of 83, he added.
ICICI opened one branch against target of 60 while HDFC did not start any new one out of target of 60.
Performance of rural banks was also dismal. Madhya Bihar Gramin Bank opened 11 new branches against the target of 75 while Bihar Gramin bank added 6 to its list out of target of 75. State Cooperative Bank and Total Cooperative bank also did not open any branch.
Siddiqui took a serious note of representatives of many banks at the bankers committee meeting for betterment of coordination between banks and the government and said director level officials of banks to be present on such occasions.
The Bihar Finance Minister expressed unhappiness over poor response to applicants for loans in different sectors. In the presence of Animal Husbandry Department Minister Awdesh Kumar Singh, he said out a total 8326 applications for loan for dairy, 7155 were approved and a sum of Rs 12,028 lakh sanctioned. Similarly out of total 433 applications for fishery, 203 were approved and a sum of Rs 644 lakh sanctioned.
The Bihar government Tuesday hinted that it may penalise banks by denying government deposits for not opening sufficient branches despite instructions of RBI to reduce people’s hardship on account of demonetisation.
“Such banks would be identified and instruction would be sent to Divisional Commissioners and District Magistrates to deprive them of government deposits,” state Finance Minister Abdul Bari Siddiqui said after a meeting with bankers.
“Direction to this effect would be issued to concerned departments soon,” he said in a statement.
Siddiqui, who presided over state-level bankers meeting regretted that out of an annual target to open 1640 new branches by December 15 this year, 35 commercial banks, rural banks and cooperative banks opened only 87 new branches.
He issued details of banks giving their performance on this count. State Bank of India which had to open 88 new branches could start only 32 branches. Central Bank of India did not open any new branch against the target of 83 while Punjab National Bank opened only 7 new branches against target of 83, he said.
Other major banks like Canara Bank, UCO bank and Bank of India drew nought against promised target of 83, he added.
ICICI opened one branch against target of 60 while HDFC did not start any new one out of target of 60.
Performance of rural banks was also dismal. Madhya Bihar Gramin Bank opened 11 new branches against the target of 75 while Bihar Gramin bank added 6 to its list out of target of 75. State Cooperative Bank and Total Cooperative bank also did not open any branch.
Siddiqui took a serious note of representatives of many banks at the bankers committee meeting for betterment of coordination between banks and the government and said director level officials of banks to be present on such occasions.
The Bihar Finance Minister expressed unhappiness over poor response to applicants for loans in different sectors. In the presence of Animal Husbandry Department Minister Awdesh Kumar Singh, he said out a total 8326 applications for loan for dairy, 7155 were approved and a sum of Rs 12,028 lakh sanctioned. Similarly out of total 433 applications for fishery, 203 were approved and a sum of Rs 644 lakh sanctioned.
Bombay HC asks Service Tax Dept to revalue Vijay Mallya’s plane
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The Bombay High Court on Tuesday asked the Service Tax Department, which has to recover dues of Rs 532 crore from the business tycoon Vijay Mallya, to revalue his luxury plane parked at the Mumbai airport. After the revaluation, the HC said it would consider the department’s request to allow a re-auction of the aircraft.
A division bench headed by Justice S C Dharmadhikari asked the department to revalue the base price of the aircraft and submit a report in a sealed cover by January 19.
“Only after such a report is submitted, the court would consider the department’s request to hold re-auction as earlier auctions have failed to get a proper bid,” said Justice Dharmadhikari.
The highest bids received in the earlier three auctions were below the reserve price of Rs 152 crore.
According to the department’s petition before the high court, Mallya owes it Rs 32.68 crore as the service tax on the tickets of his Kingfisher Airlines sold between April 2011 and September 2012. In total, Mallya owes about Rs 532 crore in tax to the department, the petition said.
Service Tax Department has attached Mallya’s private jet, an Airbus 319 which can carry 25 passengers and six crew members.
Mallya, who left the country earlier this year, is also facing action after defaulting on over Rs 9,000 crore of loans from 17 banks. Courts have declared him ‘proclaimed offender’ for not appearing before them.
In May this year, the department had issued a notice advertising auction of the plane, describing it as designed “exclusively for exotic and luxurious use”.
A division bench headed by Justice S C Dharmadhikari asked the department to revalue the base price of the aircraft and submit a report in a sealed cover by January 19.
“Only after such a report is submitted, the court would consider the department’s request to hold re-auction as earlier auctions have failed to get a proper bid,” said Justice Dharmadhikari.
The highest bids received in the earlier three auctions were below the reserve price of Rs 152 crore.
According to the department’s petition before the high court, Mallya owes it Rs 32.68 crore as the service tax on the tickets of his Kingfisher Airlines sold between April 2011 and September 2012. In total, Mallya owes about Rs 532 crore in tax to the department, the petition said.
Service Tax Department has attached Mallya’s private jet, an Airbus 319 which can carry 25 passengers and six crew members.
Mallya, who left the country earlier this year, is also facing action after defaulting on over Rs 9,000 crore of loans from 17 banks. Courts have declared him ‘proclaimed offender’ for not appearing before them.
In May this year, the department had issued a notice advertising auction of the plane, describing it as designed “exclusively for exotic and luxurious use”.
General Awareness
India Surpasses United Kingdom to become Fifth Largest Economy
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According to a report published in Forbes magazine, India has overtaken United Kingdom in terms of the size of the economy, first time in 150 years.
- With this major shift in world economy, India has now become the fifth largest country in terms of the size of the economy after the United States, China, Japan and Germany.
- The recent shift took place because of India’s continuous economic growth in the last 25 years as well as Britain’s recent economic issues after the Brexit decision over the last 12 months.
Findings of the Report
According to the Forbes report, India was expected to overtake UK GDP in 2020, but the almost 20% drop in the value of the pound in the last one year made it possible in 2017.
- Economic think-tank Centre for Economics and Business Research (CEBR) in December 2011, forecasted that India would become the “fifth largest by 2020”.
- UK’s 2016 GDP of GBP 1.87 trillion converts to $2.29 trillion at exchange rate of GBP 0.81 per $1, whereas India’s GDP of INR 153 trillion converts to $2.30 trillion at exchange rate of INR 66.6 per $1.
- The gap in economic growth is likely to widen as Indian economy is growing at 6-8% per year whereas UK’s economic growth is expected at 1-2% per year until 2020.
- Even if the currencies fluctuate that modify these figures to rough equality, the verdict is clear that India’s economy has surpassed that of the UK based on future growth prospects.
Britains Brexit Decision
Brexit is a word that has become used as a shorthand way of saying the UK leaving the EU merging the words Britain and exit to get Brexit.
- A referendum – a vote in which everyone (or nearly everyone) of voting age can take part – was held on 23 June, 2016, to decide whether the UK should leave or remain in the European Union. Leave won by 52% to 48%.
- The referendum turnout was 71.8%, with more than 30 million people voting. Britain has got a new Prime Minister – Theresa May. Former Prime Minister David Cameron resigned on the day after losing the referendum.
- The pound fell dramatically after the Brexit vote at the end of June. On 15 December the pound was worth $1.25 – compared with $1.51 a year earlier.The economy grew by 0.5% in the three months after the Brexit vote, powered by the UK’s services sector.
- This was slower than the 0.7% rate in the previous quarter, but stronger than analysts’ estimates of about 0.3%.
- The Bank of England has raised its forecast for economic growth next year to 1.4% from 0.8%, but cut expectations for 2018 to 1.5% from 1.8%.
Forbes Magazine
Forbes is an American business magazine published bi-weekly. It features original articles on finance, industry, investing, and marketing topics.
- Forbes also reports on related subjects such as technology, communications, science, and law. Primary competitors in the national business magazine category include Fortune and Bloomberg Business week.
- Its headquarters is located in Jersey City, New Jersey.
According to a report published in Forbes magazine, India has overtaken United Kingdom in terms of the size of the economy, first time in 150 years.
- With this major shift in world economy, India has now become the fifth largest country in terms of the size of the economy after the United States, China, Japan and Germany.
- The recent shift took place because of India’s continuous economic growth in the last 25 years as well as Britain’s recent economic issues after the Brexit decision over the last 12 months.
Findings of the Report
According to the Forbes report, India was expected to overtake UK GDP in 2020, but the almost 20% drop in the value of the pound in the last one year made it possible in 2017.
- Economic think-tank Centre for Economics and Business Research (CEBR) in December 2011, forecasted that India would become the “fifth largest by 2020”.
- UK’s 2016 GDP of GBP 1.87 trillion converts to $2.29 trillion at exchange rate of GBP 0.81 per $1, whereas India’s GDP of INR 153 trillion converts to $2.30 trillion at exchange rate of INR 66.6 per $1.
- The gap in economic growth is likely to widen as Indian economy is growing at 6-8% per year whereas UK’s economic growth is expected at 1-2% per year until 2020.
- Even if the currencies fluctuate that modify these figures to rough equality, the verdict is clear that India’s economy has surpassed that of the UK based on future growth prospects.
Britains Brexit Decision
Brexit is a word that has become used as a shorthand way of saying the UK leaving the EU merging the words Britain and exit to get Brexit.
- A referendum – a vote in which everyone (or nearly everyone) of voting age can take part – was held on 23 June, 2016, to decide whether the UK should leave or remain in the European Union. Leave won by 52% to 48%.
- The referendum turnout was 71.8%, with more than 30 million people voting. Britain has got a new Prime Minister – Theresa May. Former Prime Minister David Cameron resigned on the day after losing the referendum.
- The pound fell dramatically after the Brexit vote at the end of June. On 15 December the pound was worth $1.25 – compared with $1.51 a year earlier.The economy grew by 0.5% in the three months after the Brexit vote, powered by the UK’s services sector.
- This was slower than the 0.7% rate in the previous quarter, but stronger than analysts’ estimates of about 0.3%.
- The Bank of England has raised its forecast for economic growth next year to 1.4% from 0.8%, but cut expectations for 2018 to 1.5% from 1.8%.
Forbes Magazine
Forbes is an American business magazine published bi-weekly. It features original articles on finance, industry, investing, and marketing topics.
- Forbes also reports on related subjects such as technology, communications, science, and law. Primary competitors in the national business magazine category include Fortune and Bloomberg Business week.
- Its headquarters is located in Jersey City, New Jersey.
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