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LAST WEEK, the interest rate on Public Provident Fund (PPF), and a number of other deposit schemes run by the government (Kisan Vikas Patra, the girl child scheme, senior citizens deposit etc) were cut by 0.1% per annum. PPF went down from 8.1 to 8.0%.  There were some protesting noises on social media and from some of the usual suspects, but they were mostly just murmurs, probably because of the marginal quantum of the cuts. In fact, a lot of people wondered what was the point of such a small cut. This shows that the idea that these rates are now market-linked is not widely known. They are reset every quarter, depending on the interest yield on government securities. Give how things are going, it won’t be too surprising if these rates fall further. PPF rates are already at a historic low and if they go below 8% then the psychological impact of hearing 7-point-something will be huge on savers. The KVP is already down to 7.7%. It’s also worth noting that there’s a maths trick to th...

The comptroller and auditor general has initiated an audit of entities claiming tax exemption on agricultural income amid suggestions from some political parties and income tax authorities that a blanket exemp tion be done away with and tax be levied after a threshold. The auditor has written to the finance ministry seeking details of entities which have declared agricultural income and the amount of tax exemption granted to them. Recently, tax authorities had raised concerns about possible misuse of the exemption availab le to agricultural income, although the government has clearly said that there was no move to impose tax. Finance ministry data showed that nearly four lakh people declaring farm income had been granted exemption during 2013-14. Total agricultural in come exempted from tax in 2013-14 was Rs 9,338 crore. The details were as per the list of those who had filed their returns till November 2014. During 2013-14, the top 10 entities had claimed tax exemption of Rs 628 cror...

To Meet Top Mgmt Of These Cos To Set Up Shop In India. After a high deci bel `Make in India' pitch, the government has now turned to a more targeted approach to boost foreign direct invest ment (FDI) inflows. In a first, the departmen of industrial policy and pro of industrial policy and pro motion (DIPP), along with In vest India, has identified 150 companies as potential inves tors and is meeting their top management teams individu ally as it seeks to ensure tha FDI inflows rise for the fourth straight year. The idea is to tap companies looking to set up shop in India or are eyeing expansion. Re cently , a team led by DIPP secre tary Ramesh Abhishek met Fi at Chrysler COO Alfredo Alta villa in Italy to address the com pany's concerns. Similarly there has been a fresh outreach to Italian chocolatier Ferrero the maker of Ferrero Rocher which decided to set up a plan in China to cater to demand in Japan and Korea after its run ins with the Food Safety and Standards Authority o...

RBI May Do the Expected, Cut Policy Rate by 25 bps 14 of 18 banks and financial institutions polled expect central bank to cut rate. Borrowers can look forward to cheaper loans as most bankers expect the Reserve Bank of India, backed by the newly formed Monetary Policy Committee (MPC), to cut the policy rate by 25 basis points in its bi-monthly credit policy on Tuesday . A majority , 14 of the 18 banks and financial institutions polled by ET, expects the central bank to cut the policy rate, while the rest feel the rates may remain unchanged as the country steps into the league of developed nations by having a panel to decide policy rates. “There are structural factors for price stability, which are consistent with a case for a rate cut,“ said Saugata Bhattacharya, chief economist at Axis Bank. “While a normal monsoon looks to have stabilised prices, capex still remains weak with low credit demand,“ he said. “There are indeed upside risks to inflation, be it the Seventh Pay Commission ...