Cabinet approves CGST refund scheme
The government has approved a new metro rail policy, a scheme to refund central goods and services tax ( CGST) to industrial units in Himachal Pradesh, Uttarakhand, Jammu & Kashmir and the North-East ctill 2027, and changes to strategic disinvestment policy to speed up decision-making. The cabinet cleared the CGST refund scheme with a budgetary allocation of Rs 27,413 crore, which will come as a big relief to sectors like pharma, automobiles, FMCG.
These units, which hitherto enjoyed exemption from central excise for 10 years, will get a refund of 58 per cent of CGST. “Within the framework of the GST Act, each industry will be entitled to its own refund mechanism during this particular period (until March 31, 2027),” finance minister Arun Jaitley told reporters after the meeting of the cabinet that was presided over by Prime Minister Narendra Modi on Wednesday. Under the new GST regime rolled out on July 1, there is no provision for exemptions.
Central or state governments, however, are empowered to refund their portion of tax.
Boost to urban transport
The cabinet gave its nod to a new metro rail policy that seeks to change the face of mass transit systems in urban centres and makes private investment mandatory. “The new metro rail policy 2017 will help a large number of cities to realise growing metro rail aspirations. The policy promotes Make in India in metro and make these projects cost-effective,” Jaitley said. Private investment has been made compulsory to meet the resource demands for capital-intensive, high-capacity metro projects.
Currently, very few metro projects are being undertaken with private participation.
“Private participation either for complete provision of metro rail or for some unbundled components (like automatic fare collection or operation and maintenance of services) will form an essential requirement for all metro rail projects seeking central financial assistance,” according to the policy approved on Wednesday. Jaitley said 370 km of metro lines were already operational in seven cities and 537 km was under construction in 12 cities. “The policy mandates evaluation of other modes of mass transit to ensure selection of the least-cost public transport model,” he said.
The cabinet committee on economic affairs (CCEA) approved an alternative mechanism for pursuing the government’s strategic sale programme. Under this arrangement, Jaitley, roads minister Nitin Gadkari and minister of relevant administrative ministry will decide on matters relating to terms and conditions of sale from the stage of inviting expressions of interest to that of seeking financial bids.
The government plans to sell a 26 per cent stake in BEML and a 51 per cent stake in New Delhi-based helicopter service firm Pawan Hans Ltd. Lucknow-based three-wheeler maker Scooters India will be the first full strategic sale with the government looking to divest its entire holding. The government further empowered the core group of secretaries to take policy decisions with regard to procedural issues and to consider deviations as necessary from time to time for effective implementation of the CCEA’s decisions.
“The approval will help in speedy completion of strategic disinvestment deals,” the statement said. So far in this fiscal, the government has raised Rs 8,427 crore through disinvestment. It has set itself a target of Rs 72,500 crore in the current financial year, of whichRs 15,000 crore is to come through strategic sales. Jaitley said the Union cabinet was given a presentation on the success of the justconcluded initial public offer of Cochin Shipyard.
Other decisions
The Union cabinet approved a proposal for raising extra budgetary resources (EBR) of up to Rs 9,020 crore as needed in the current fiscal year by (Nabard) through bonds to ensure a lending rate of 6 per cent per year on borrowings through the Accelerated Irrigation Benefits Programme (AIBP) for 99 ongoing prioritised irrigation projects. It approved the creation of a nonlapsable pool in the public account for secondary and higher education known as Madhyamik and Uchchtar Shiksha Kosh (MUSK) into which all proceeds of the secondary and higher education cess will be credited.
The Economic Times, New Delhi, 17th August 2017
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