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New Delhi: Giving thumbs up to the demonetisation of high value currency notes last year and the upcoming roll out of the goods and services tax (GST), the World Bank has said the two reforms will increase the formalisation of the Indian economy. In its latest India Development Update released on Monday, the World Bank said India’s economy will grow 7.2% in fiscal year 2017-18. “In the long-term, demonetization has the potential to accelerate the formalization of the economy… the implementation of the GST is a key complementary reform that will support formalization, as firms have a strong incentive to register with GST to obtain input tax credits,” the World Bank said in the biannual report themed ‘Unlocking Women’s Potential’. GST, the report said, would lead to higher tax collection, greater digital financial inclusion and make India’s fundamentals stronger and yet not increase the burden on the poor. Given the effi- ciency and revenue gains that the reform will eventually achie...

Labour minister Bandaru Dattatreya on Monday reiterated the government’s resolve to pursue labour reforms in a manner that will lead to creation of quality jobs, seeking to dismiss criticism that the BJP-led NDA government has presided over three years of jobless growth in the country. "Labour reforms are on the agenda. Group of ministers has cleared the wage code. This will now go to the Cabinet and will come up in the next session of Parliament," Dattatreya said while recounting his ministry’s achievements over the past three years. Highlighting the combined efforts of 23 ministries in imparting skills training to 1.25-crore people, Dattatreya said, "Employment generation is our top priority. So far six lakh jobs have been created under the Pradhan Mantri Rozgar Protsahan Yojana and going forward, we aim to give jobs to 50 lakh youths in the country."   The minister said that in the next few months, the labour ministry will bring Anganwadi and Asha workers u...

The Securities and Exchange Board of India (Sebi) on Monday proposed tighter regulations participatory notes (pinstrument used by foreign investors to take exposure to the domestic market without registering in India. In a discussion paper, the market regulator proposed to bar pnotes, or offshore derivative instruments (ODIs), from taking speculative positions in the futures and options segment. It said noteholders would be allowed exposure to the derivatives market only for hedging and not for naked speculation. The ban on derivative trades without underlying equity could impact nearly a third of ODI subscribers, who currently deal only in derivatives, say experts. A large number of investors also deal in both cash and derivatives, but don´t use derivatives for hedging purpose. “Through these changes, Sebi is trying to curb the volatility in the F&O market that emanates through ODIs. This, however, should not impact participants whose investment strategies allow for correlatio...

India will levy a 5% tax on all equipment required for generating solar power compared with nil duty now, a government official clarified, putting an end to confusion about the new taxation policy for the industry after its landmark tax reform. “All solar equipments and its parts would attract 5% GST only,” revenue secretary Hasmukh Adhia said in a tweet on Sunday, contrary to the initially planned two tax slabs of 5% and 18%. India, the world’s third biggest greenhouse gas emitter, has set a target to produce 100 gigawatts of solar power in five years to fuel its economic expansion while reducing its carbon footprint. A flat 5% tax on all solar power equipment will put the sector on par with domestic coal from 1 July and make solar energy generation more expensive. The 5% tax, however, is in contrast to a previous notification that had fixed an 18% tax on photovoltaic cells and panels, which account for a bulk of solar power generation costs. Domestic coal sales now attract a 11.6...

The decision on revising the tax rates fixed on various goods and services has been left to the discretion of the GST Council, Central Board of Excise and Customs Chairperson Vanaja Sarna said on Monday. “We have been getting representations from various industries and businesses to revise rates. So, whether any of the items will be opened for revision or not, it is something the council will take a call on that. It is meeting on June 3,” she said. Various industries and businesses had been petitioning the central government for revising rates, she told reporters in Bengaluru. Sarna also said that the Council could revise rates if there is any justification for reconsideration. Business Standard New Delhi, 30th May 2017