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FM Seeks to bring digital firms under the tax net The government has sought to bring the digital economy into the tax net with a proposal to this effect in Thursday’s Union Budget.The proposal seeks to tax profits made by digital firms in India using the concept of significant economic presence. Analysts point out that this could apply to all online advertisements, online searches, cloud services and other digital products and ensure that profits of these firms attributable to Indian users is taxed in India. This could bring firms like Google, Facebook and Netflix with huge consumer bases in India into the tax net. Messages sent to Facebook, Google and Netflix remained unanswered till press time.To be sure, firms based in countries having double taxation avoidance agreements with India will be protected. Also, the provision will kick in only at a threshold that will be notified later. Significant economic presence has been defined in the finance bill as “any transaction in re...

Arun Jaitley raises rates to boost Make in India In his Budget speech, Finance Minister Arun Jaitley said there was potential for domestic value addition in certain sectors The government is hoping to garner Rs 60 billion by raising import duties on about 50 items — ranging from phones and TV parts to juices and edible oil — in the Budget for 2018-19. The customs duty hike in the range of 5 to 10 percentage points is aimed to encourage local manufacturing under the government’s flagship Make in India programme launched in 2014. This is the second hike in two months by the government, as it aims to achieve twin objective of boosting domestic manufacturing and garnering additional revenue amid floundering goods and services tax (GST) collections. There is a Rs 500 billion shortfall in GST revenue for Centre in the current fiscal. The customs duty on mobile phones was increased from 15 to 20 per cent, while that on parts of LCD and LED panels of televisions has been doubled to 1...

FM  Shuns Ambitious  Targets For FY 19 Having set an ambitious target in 201718, the government seems to have turned realistic on garnering non-tax revenues for 201819. On the revenue side,a slippage in projected non-tax revenues collections was the major factor for the government exceeding by 0.3 percentage points the fiscal deficit target set under the fiscal consolidation road map for 201819. The 13.5 per cent shortfall in nontax revenue collections (over the Budget Estimates) has occurred in FY18 despite the fact that the Reserve Bank of India (RBI) transferred an additional Rs100 billion to the government.In all, RBI has transferred surpluses of RS  406.59 billion (Rs 306.59 had been transferred earlier), which was, however, lower than the Rs 600 billion projected in the Budget Estimates (BE). As a result, the government projected a modest rise ofa3.8 per cent (Rs 2.45 trillion) in non tax revenues for 2018-19 even on the lower base of RE of 201718. If t...

GOVERNMENT SET TO REAP Rs  1 TRN THIS YEAR The Centre is set to garner its highest ever proceeds of Rs  1 trillion through divestment of state owned entities in 201718, compared to a budgeted estimate of RS 725 billion. And, for 2018-19, Finance Minister Arun Jaitley has setatarget of RS 800 billion for the Department of Investment and Public Asset Management (DIPAM).The revised estimates of Rs 1 trillion is around RS 110 billion more than the disinvestment proceeds of the previous two fiscal years put together. The centrepieces are, of course, the acquisition of HPCL´s 51 per cent stake by ONGC for Rs 369 billion and the launch of the Bharat 22 exchange traded fund (ETF) for Rs 145 billion.The finance minister also said that DIPAM will launch a debt focused ETF in the coming fiscal “The government has approved[the] listing of 14 CPSEs (central public sector enterprises), including two insurance companies, on the stock exchanges.The government has also initiated the ...

Budget will strengthen ´ new India´ vision: Modi Terming the Union Budget for 201819 “development friendly”, Prime Minister Narendra Modi said on Thursday it had focused on the needs of rural areas and would strengthen the vision ofa ´new India´ Modi said the Budget had devoted attention to all sectors, ranging from agriculture to infrastructure, and was “farmer friendly, common citizen friendly, business environment friendly, and development friendly”.On MSME sector The Prime Minister said the government would soon announce concrete steps to address the non-performing asset and stress account issues for the micro, small &medium enterprises (MSME) sector. “For a long time, MSMEs faced a lot of burden on the tax front.In this Budget, we have also reduced the corporate taxes that MSMEs owe. Now, they have to pay only 25 per cent tax instead of 30 per cent,” he said. On ´Ayushman Bharat´ scheme Modi said the Ayushman Bharat scheme would allow the poor to receive up to RS 500,0...

Defence budget increases 8 percent, unlikely to cover rise in cost The 2018-19 Budget has raised defence allocations from the current year´s revised estimate of Rs 3.74 trillion to Rs 4.04 trillion, an increase of Rs 303.61 billion, or 8.1 per cent, which, analysts say, is insufficient to even cover year on year inflation in manpower and equipment costs. These figures include all government expenditure on defence, such as allocations to the ministry, defence pension, revenue and capital expenditure, research and development (R&D), and production.The defence ministry, for reasons unclear, excludes pension from the Budget figures. While military planners would be dissatisfied with the small overall increase, the silver lining is the expenditure of the entire capital budget this year without surrendering billions of rupees, as the military did the previous two years. However, the increase in capital allocations, which have risen from Rs 0.91 trillion in the current year to R...

GST hurdle: E way bill put on hold The government on Thursday deferred the electronic way (eway) bill indefinitely on the first day of countrywide rollout as consignments faced delays.Businesses faced disruptions after the portal stopped functioning from around noon, causing wide spread confusion. Companies were seen approaching the National Informatics Centre (NIC), which is developing the e-way portal, with a flood of complaints over the past couple of days. “In view of difficulties faced by the trade in generating eway bill due to initial tech glitches, it has been decided to extend the trial phase for generation of e-waybill, both for inter and intrastate movement of goods,´´ GST@GoI, the official government handle, posted on Thursday evening. The new rollout date will be announced later.The NIC has sought 15 days to fix the problems. E-way bill will help the central and state tax authorities track interstate and intrastate movements of goods that are part of consignments o...

1,235 new FPIs register with SEBI in Apr–Dec FY’18  As many as 1,235 fresh foreign portfolio investors (FPIs) were registered with SEBI in April–December of the current fiscal, mainly due to their continued interest in the Indian capital markets, latest data from the regulator showed. In comparison, close to 3,500 new FPIs registered with Securities and Exchange Board of India (SEBI) in the entire 2016-17 fiscal. ‘Euphoric sentiment" The number of FPIs with the markets regulator climbed to 9,042 at the end of December from 7,807 at March-end, resulting in an addition of 1,235, according to SEBI data. “The reason for increasing FPI registrations is continued interest in the Indian equity, bonds and real estate,” said Arvind Chari, head, fixed income and alternatives, Quantum Advisors. Further, market experts are of the view that several measures taken by SEBI added to India’s attractiveness. In addition, SEBI’s Board, last month, decided to relax entry norms for FPIs will...

Core sector growth slows to 4 Percent  in Dec Output growth recorded in December is the lowest since July 2017, when these core sectors had witnessed a 2.9% expansion Growth of the eight core sectors slowed to a five-month low of 4 per cent in December 2017 due to negative performance of segments like coal and crude oil, official data showed today. The output growth recorded in December is the lowest since July 2017, when these core sectors had witnessed 2.9 per cent expansion.These eight industries -- coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity -- had witnessed a growth of 5.6 per cent in December 2016. The output of coal and crude oil sectors contracted 0.1 per cent and 2.1 per cent respectively during the month under review.Growth in steel and electricity generation slowed to 2.6 per cent and 3.3 per cent respectively in December last year as against 15.9 per cent and 6.4 per cent in the same month of 2016. Refinery pro...

CSO revises FY16 GDP growth to 8.2%, FY17 unchanged at 7.1% Under the third revision, the CSO has estimated GDP growth in 2014-15 at 7.4 per cent from earlier estimates of 7.5 per cent. The Central Statistics Office on Wednesday revised the Gross Domestic Product (GDP) growth rate for 2015-16 to 8.2 per cent from the earlier estimates of 8 per cent and kept the 2016-17 growth unchanged at 7.1 per cent. The real GDP or GDP at constant (2011-12) prices for the years 2016-17 and 2015-16 stands at Rs 121.96 lakh crore and Rs 113.86 lakh crore respectively, showing growth of 7.1 per cent during 2016-17 and 8.2 per cent during 2015-16, the CSO said in a statement. In terms of real GVA (gross value added), it said the GVA at constant (2011-12) basic prices grew 7.1 per cent in 2016-17, as against a growth of 8.1 per cent in 2015-16. According to advance GDP estimates of CSO, the GVA growth on 2011-12 price was estimated at 6.6 per cent for 2016-17. The CSO today released the first rev...

SEBI agrees to transfer Rs 16.7 billion of surplus funds to government Extra funds with regulatory bodies have been a contentious issue for year. Capital markets regulator, the Securities and Exchange Board of India (Sebi), has agreed to transfer Rs 16.7 billion of its surplus funds to the government. The Centre has been eyeing these resources, which would enable it to reduce the fiscal deficit. The move, however, was seen as contentious as it potentially amounted to an infringement on the independence of the regulatory body. “Sebi has agreed to the long-pending government demand to transfer surplus funds with it into a public account,” said a source. The surplus funds with Sebi — and over a dozen other regulators such as the Insurance Regulatory and Development Authority of India (Irdai) and Pension Fund Regulatory and Development Authority (PFRDA) — were pointed out in a report by the Comptroller and Auditor General of India (CAG). According to a 2017 report of the CAG, these...