Skip to main content

Govt Seeks RS 13,000-cr Surplus from RBI

Govt Seeks RS 13,000-cr Surplus from RBI
The government has not asked the Reserve Bank to pay any special dividend and is only seeking Rs 13,000 crore of surplus lying with the central bank, Economic Affairs Secretary Subhash Chandra Garg has said.
In August, the RBI had paid a dividend of Rs 30,659 crore for the fiscal ended June 2017. It was less than half the Rs 65,876 crore it had paid in 2015-16
The government had budgeted for a Rs 58,000 crore dividend from the RBI in its Budget for this fiscal year. “There is no proposal at this stage to ask for any special dividend. What is being discussed is to only ask for what the RBI earned this year but did not distribute. That is about ?13,000 crore. That's what the government has suggested the Reserve Bank to transfer,” Garg said.
RBI's profit was about Rs 44,000 crore, of which Rs 30,000 crore has been distributed and Rs13,000 crore it retained towards risks and reserves. So the government has made a suggestion that the Rs 13,000 crore may also be transferred, he said.
The government had last month announced an unprecedented Rs 2.11lakh crore capital infusion in PSU banks, which are grappling with high non-performing assets (NPAs). Asked about the contours of the recap bonds, Garg said, “the recapitalisation package is in the final stages. The Department of Financial Services is working on it and soon we would see all these aspects being addressed”.
Of the Rs 2.11 lakh crore,Rs 1.35 lakh crore would be infused through recapitalisation bonds and the remaining Rs 76,000 crore through budgetary support and banks diluting equity in capital market.Credit rating agency Moody's had last week upgraded India's sovereign rating after a gap of over 13 years citing reform push and steps being taken by the government to solve the high NPA problems in the banking sector.
Bad loans in the sector have neared Rs 10 lakh crore.Garg said Moody's has acknowledged the reform process and believes that India is in a position to control its debt and put its banking sector in order.
The Economic Times,New Delhi, 20th November 2017

Comments

Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Firms with sales below Rs.50 crore out of ambit

The tax department has reiterated that the PoEM rules, which require foreign firms to pay taxes in India if the effective control is here, will not apply to companies withaturnover of Rs.50 crore or less inafinancial year. Last month, the tax department had come out with the longawaited Place of Effective Management (PoEM) rules, which require foreign companies in India and Indian firms with overseas subsidiaries to pay local taxes if their businesses are effectively controlled by Indians. Then the rules did not setathreshold above which they were to apply. However, the accompanying press release states that the rules will not apply to companies withaturnover of up to Rs.50 crore inayear. That created confusion whether the threshold will be adhered to. Inacircular to clarify things, the Central Board of Direct Taxes (CBDT) said the provision "shall not apply toacompany havingaturnover or gross receipts of ~50 crore or less inafinancial year".

PoEM rules essentially target shell …