Govt unveils ₹6L-crore monetisation scheme
NEW DELHI, Aug 23: The government will raise ₹88,000 crore this year by leasing infrastructure assets of central government ministries and state-run companies under a ₹6 trillion National Monetisation Pipeline (NMP) it unveiled on Monday.
The funds will then be used to build new infrastructure assets, helping boost economic growth in Asia’s third-largest economy.
Annual targets under the four-year pipeline have been set at ₹1.62 trillion for FY23, ₹1.79 trillion for FY24 and ₹1.67 trillion in the following year.
The top five sectors by value under the government’s asset monetization programme are roads (27%), railways (25%), power (15%), oil and gas pipelines (8%) and telecom (6%).
Among projects the government plans to lease are 26,700km of roads, 90 passenger trains, 400 railway stations, 28,608 circuit km transmission lines, 286,000km of Bharatnet fibre network and 14,917 towers owned by state-run Bharat Sanchar Nigam Ltd and Mahanagar Telecom Nigam Ltd.
Other core infrastructure assets that will be leased under NMP include airports in smaller cities, dedicated freight corridor assets, warehousing assets of state-run companies such as Central Warehousing Corp and NAFED, and sports stadiums.
Finance minister Nirmala Sitharaman said the monetisation pipeline will be co-terminus with the ₹100 trillion national infrastructure pipeline from this year.
“There won’t be any land sale happening under it. The NMP is talking about brownfield assets where investment has already been made, which are either languishing, not fully monetised or remaining underutilised. So, by bringing in private participation, you are going to monetise it better, and with whatever resource you are getting, you can put it into further infrastructure creation,” she added.
The government plans to create a virtuous cycle by utilising the resources raised through monetising existing assets to create new greenfield infrastructure assets and further monetising these newly created assets.
“What we have estimated is the normative value. The real value will emerge through the bidding process,” said Amitabh Kant, chief executive of NITI Aayog.
The monetisation of core assets under NMP is expected to be carried out through public-private partnership models such as operate-maintain-transfer, toll-operate-transfer, etc, as well as structured financing vehicles such as infrastructure investment trusts (InvITs) and real estate investment trusts (Reits).
The asset monetisation programme does not mean ceding ownership of these assets or a fire sale, said Rajiv Kumar, vice-chairman of NITI Aayog.
“A fair value will be achieved by transparent, accountable mechanisms, and at the end of the day, these assets will be handed over back to the government for further utilisation,” he added.
For example, all state-run companies have their guest houses across the country, and these can be brought together to create much better utilisation through public-private participation, Kumar said. “The opportunity and potential are quite large,” he added.
Sitharaman tells Infosys CEO Parekh to resolve IT-portal glitches by Sept 15
NEW DELHI, Aug 23: The Income Tax Department on Monday said Union finance minister Nirmala Sitharaman held a meeting with Salil Parekh, the CEO of Infosys, and conveyed her ‘disappointment’ as taxpayers continue to face glitches in the e-filing portal. She sought an explanation from Parekh regarding the issues that plague the web portal.
The Union finance minister was concerned about the glitches still being there on the portal despite two and half months since its launch, the Income Tax department said in a statement.
“The ministry of finance emphasized that there is a need for putting in more resources and efforts on the part of Infosys so that the much delayed delivery of agreed services is ensured,” the statement said.
The finance minister demanded that the Infosys team resolve the issues faced by taxpayers while using the portal by September 15.
“The Hon’ble finance minister demanded that the issues faced by taxpayers on current functionalities of the portal should be resolved by the team by September 15, 2021, so that taxpayers and professionals can work seamlessly on the portal,” the statement said.
Infosys CEO Parekh said that over 750 team members were working on this project. He also intimated the Union finance minister that COO of Infosys Pravin Rao was personally overseeing this project. Parekh said that efforts are being made to ensure the smooth functioning of the portal.
RBI issues new guidelines for locker in banks
NEW DELHI, Aug 18: The Reserve Bank of India (RBI) on Wednesday directed banks to maintain a branch-wise list of vacant lockers as well as a wait-list for the purpose of allotment of lockers and ensure transparency in allotment of lockers. Revised instructions will come into effect from January 1, 2022, the RBI said.
“In order to facilitate customers making informed choices, banks shall maintain a branch wise list of vacant lockers as well as a wait-list in Core Banking System (CBS) or any other computerized system compliant with Cyber Security Framework issued by RBI, for the purpose of allotment of lockers and ensure transparency in allotment of lockers," the RBI said.
The banks, the central bank said, shall acknowledge the receipt of all applications for allotment of locker and provide a wait list number to the customers, if the lockers are not available for allotment.
According to the new guidelines, the existing customers of a bank who have made an application for locker facility and who are fully compliant with the CDD (Customer Due Diligence) criteria may be given the facilities of safe deposit lockers/ safe custody article subject to on-going compliance.
Customers who are not having any other banking relationship with the bank may be given the facilities of safe deposit locker/safe custody article, it said.
The RBI said that banks shall incorporate a clause in the locker agreement that the locker-hirer/s shall not keep anything illegal or any hazardous substance in the Safe Deposit locker. "If the bank suspects the deposit of any illegal or hazardous substance by any customer in the safe deposit locker, the bank shall have the right to take appropriate action against such customer as it deems fit and proper in the circumstances," it added.
The central bank further states that banks shall have a Board approved agreement for safe deposit lockers. For this purpose, it said, banks may adopt the model locker agreement to be framed by IBA. "This agreement shall be in conformity with these revised instructions and the directions of the Hon’ble Supreme Court in this regard. Banks shall ensure that any unfair terms or conditions are not incorporated in their locker agreements," it said.
"The terms of the contract shall not be more onerous than required in ordinary course of business to safeguard the interests of the bank. Banks shall renew their locker agreements with existing locker customers by January 1, 2023," the RBI said.
The RBI said the banks shall have a Board approved policy for settlement of claims. It has also asked the banks to formulate policy for nomination and release of contents of safety lockers/safe custody article to the nominee and protection against notice of claims of other persons.
"In order to ensure that the articles left in safe custody and contents of lockers are returned to the genuine nominee, as also to verify the proof of death, banks shall devise their own claim formats, in terms of applicable laws and regulatory guidelines," it said. Banks shall settle the claims and shall release contents of the locker to survivor(s) / nominee(s) within a period not exceeding 15 days from the date of receipt of the claim subject to the production of proof of death of the depositor, the RBI added.
Modi Launches Vehicle Scrappage Policy in India, to Begin from 2023
NEW DELHI, Aug 13: Prime Minister Narendra Modi has launched the much awaited vehicle scrappage policy in India today. He launched the policy at the Gujarat Investor Summit and has requested youth & start-ups to join this programme. Vehicle scrapping will help phase out unfit and polluting vehicles in an environment friendly manner, he said.
Modi also mentioned that the govt aims to create a viable circular economy and bring value for all stakeholders while being environmentally responsible.
In a tweet today, Narendra Modi mentioned – “The launch of Vehicle Scrappage Policy today is a significant milestone in India’s development journey. The Investor Summit in Gujarat for setting up vehicle scrapping infrastructure opens a new range of possibilities. I would request our youth & start-ups to join this programme.”
The government expects to generate employment for about 35,000 people at vehicle fitness centres and scrapyards and a collective investment of Rs 10,000 crore. The vehicle fitness test cost will depend on the type of vehicle. For a personal vehicle, it will cost Rs 300-400, while for a commercial vehicle it could be Rs 1,000-1,500.
“We propose to scrap vehicles, which are 15 years and over, owned by the Central and state governments by April 2022,” said Giridhar Aramane, secretary in the road transport and highways ministry.
“From 2023 onwards, heavy commercial vehicles need to be scrapped if they do not conform to the fitness level prescribed under the rules. For personal vehicles, we plan to implement this from June 2024 onwards.”
On the other hand, the vehicle scrappage policy is likely to give a major boost to the metal recycling business, said Grant Thornton Bharat. The report also said that the policy is likely to affect major changes in the Indian automotive industry.
“Be it generating employment, reducing pollution, or accelerating demands for electric vehicles, the policy proves to be a win-win situation for the auto industry and various other stakeholders,” the report said.
The policy mandates that passenger vehicles older than 15 years and commercial vehicles older than 20 years will have to be scrapped mandatorily if they fail fitness and emission tests. Moreover, the policy is likely to positively impact the sales of new cars and pave way for more opportunities for the Indian auto sector.
“One of the key opportunities that will emerge from the vehicle scrappage policy will be for the metal recycling business. It will also to an extent reduce the cost of production. Steel is a crucial component for automobile manufacturers, and its price has been growing up to almost 30 per cent in the last six months,” said Saket Mehra, Partner and Automotive Sector Leader, Grant Thornton Bharat.
“If you were to recycle the material and use the same for manufacturing, to an extent the prices will get rationalised. This is one of the biggest advantages. However, to what extent the price reduction will benefit the customer remains to be seen. At least to a certain point, there would be an impact on the lowering of the cost of production.”
As of April 2021, there were 1.7 million old medium and heavy commercial vehicles plying on the Indian roads according to the Ministry of Road Transport and Highways. In addition, the report cited that industry believes that the policy has the potential to generate demand for new vehicles.
Indian Govt nullifies retro tax; introduces Bill to amend Income Tax Act
NEW DELHI, Aug 5: The Indian government on Thursday has finally moved to bury the ghost of retrospective tax as it proposed a Bill to amend the Income Tax Act.
Finance Minister Nirmala Sitharaman introduced The Taxation Laws (Amendment) Bill in the Lok Sabha today.
"The Bill proposes to amend the Income-tax Act, 1961 so as to provide that no tax demand shall be raised in future on the basis of the said retrospective amendment for any indirect transfer of Indian assets if the transaction was undertaken before 28th May, 2012 (i.e., the date on which the Finance Bill, 2012 received the assent of the President)," the Finance Ministry said in a statement.
"It is further proposed to provide that the demand raised for indirect transfer of Indian assets made before 28th May, 2012 shall be nullified on fulfilment of specified conditions such as withdrawal or furnishing of undertaking for withdrawal of pending litigation and furnishing of an undertaking to the effect that no claim for cost, damages, interest, etc., shall be filed. It is also proposed to refund the amount paid in these cases without any interest thereon," the government stated.
"The Bill also proposes to amend the Finance Act, 2012 so as to provide that the validation of demand, etc., under section 119 of the Finance Act, 2012 shall cease to apply on fulfilment of specified conditions such as withdrawal or furnishing of undertaking for withdrawal of pending litigation and furnishing of an undertaking that no claim for cost, damages, interest, etc., shall be filed," it stated further.
"In the past few years, major reforms have been initiated in the financial and infrastructure sector which has created a positive environment for investment in the country. However, this retrospective clarificatory amendment and consequent demand created in a few cases continues to be a sore point with potential investors. The country today stands at a juncture when quick recovery of the economy after the COVID-19 pandemic is the need of the hour and foreign investment has an important role to play in promoting faster economic growth and employment," government further said.
This bill impacts retro tax cases of at least two big companies -- Cairn Energy Plc and Vodafone Group of UK. Both firms had won international arbitrations against levy of retrospective taxes on them.
The proposal comes in the midst of India's Cairn Energy arbitration case, where the British oil and gas energy is seeking to recover $1.2 billion from New Delhi. However, the government on Monday said it has not received any formal proposal from them to resolve the issue within the country's legal framework.
Over Rs 1.16 lakh cr gross GST revenue collected in July
NEW DELHI, Aug 1: Over Rs 1.16 lakh crores gross Goods and Services Tax (GST) revenue was collected in July of which CGST is Rs 22,197 crores, SGST is Rs 28,541 crores, IGST is Rs 57,864 crores and Cess is Rs 7,790 crores (including Rs 815 crores collected on import of goods), the Ministry of Finance informed on Sunday.
These figures include GST collection received from GSTR-3B returns filed between July 1, 2021, to July 31, 2021, as well as IGST and cess collected from imports for the same period.
The GST collection for the returns filed between July 1 to July 5, 2021, of Rs 4,937 crores had also been included in the GST collection for June 2021.
The government has settled Rs 28,087 crores to CGST and Rs 24,100 crores to SGST from IGST as regular settlement.
The total revenue of the Centre and the States after regular settlement in the month of July 2021 is Rs 50,284 crores for CGST and Rs 52,641 crores for the SGST, the finance ministry said.
According to the release, the revenues for the month of July 2021 are 33 per cent higher than the GST revenues in the same month last year.
"During the month, revenues from import of goods were 36 per cent higher and the revenues from the domestic transactions (including import of services) are 32 per cent higher than the revenues from these sources during the same month last year," it said.
GST collection, after posting above Rs 1 lakh crore mark for eight months in a row, dropped below Rs 1 lakh crore in June 2021 as the collections during the month of June 2021 predominantly related to the month of May 2021 and during May 2021, most of the States and Union Territories were under either complete or partial lockdown due to COVID-19.
"With the easing out of Covid restrictions, GST collection for July 2021 has again crossed Rs 1 lakh crore, which clearly indicates that the economy is recovering at a fast pace. The robust GST revenues are likely to continue in the coming months too," the Finance Ministry said.