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The Fifteenth Finance Commission (15th FC) headed by NK Singh is expected to create a defence and internal security fund likely to be called Rashtriya Suraksha Nidhi (RSN) by setting aside money from gross tax revenues of the central government.  The Cabinet cleared enabling approvals on July 17, increasing focus on national security while also indicating it wants states to share the financial burden of maintaining and upgrading its security apparatus, including buying weapons from global suppliers, ET’s conversations with highly placed sources and review of confidential documents reveal.  Although the original terms of reference (ToR) of the 15th FC did ask it to look into the demand on central resources for defence and national security, they had not specifically mandated FC to suggest creation of a fund outside the Consolidated Fund of India. The Cabinet decision to amend ToR came after prolonged discussions between the government and the commission and splitting hairs ov...

The high-level Bimal Jalan panel could hold another meeting before submitting its report on the Reserve Bank of India’s economic framework that will dictate how much of its surplus could be transferred to the government and when. This follows a bureaucratic reshuffle late on Wednesday evening.  “We could hold another meeting as a new economic affairs secretary has been appointed,” said a person familiar with the matter. The call will be taken in some time, the person told ET.  ET had reported that the recommendations of the report weren’t unanimous with Subhash Chandra Garg having dissented. Garg was transferred to the power ministry from his post as economic affairs secretary on Wednesday. The panel favoured periodic transfers of the RBI’s surplus reserves to the government over three to five years, contrary to the government’s expectation of a lumpsum payment.  Any additional fund transfers from the RBI will help the government bridge its fiscal deficit as also meet o...

The meeting, which was to be held through a video conferencing, had a single agenda to boost production of electric vehicles  The GST Council meeting, which would have taken up the issue of slashing of tax rates for electric vehicles, was on Thursday rescheduled for Saturday.  Union Finance Minister Nirmala Sitharaman, the chairman of the Council, was busy with the ongoing Parliament session, officials said. The meeting, which was to be held through a video conferencing, had a single agenda to boost production of electric vehicles (EVs). The agenda included reduction in GST rate from 12 per cent to 5 per cent for electric vehicles and from 18 per cent to 12 per cent for their chargers. It was also to discuss GST exemption on hiring electric buses. All state finance ministers and officials were logged in for 15 minutes for the meeting at 3 pm before being informed of further delay and a possibility of deferment. In fact, a few finance ministers, mostly from Opposition-ruled s...

Super-rich Indians are rushing to buy tax-free bonds, which offer an effective double-digit return in the proposed new tax regime, at a time when uncertainty has gripped the stock market.   While there aren’t any fresh issues of tax-free bonds, those issued during 2011-2015 by the National Highway Authority of India, RECNSE -0.13 %, Power Finance Corp and HudcoNSE 1.85 % and other state-run firms with tenures of 10, 15 and 20 years are available for purchase on the secondary marke ..  These bonds currently yield 5.5- 5.9 per cent, compared with 6.1-6.5 per cent a month ago. What makes these attractive to the ultra high-net-worth individuals is that the returns are tax free — that is an enticement for those who are taxed at as high as 42.74 per cent as per the new tax proposals. If the tax benefit is accounted for, the “return for the highest tax-bracket investor will be more than 10 per cent, making for an attractive investment opportunity”, said Vikram Dalal, MD, Syn...

The regulator said it has been receiving various references from listed firms regarding violations related to code of conduct.  Markets regulator Sebi Friday came out with standardized format for reporting violations of code of conduct, formulated under Prohibition of Insider Trading (PIT) norms.  Under PIT norms, all listed firms, intermediaries and fiduciaries are required to formulate a code of conduct for designated persons as well as for their relatives and inform the regulator about any such violation.  Under the code of conduct, the designated persons and their relatives are barred from trading while in the possession of unpublished price sensitive information (UPSI). Besides they are required to maintain the confidentiality of the UPSI, among others restrictions are placed.  The regulator said it has been receiving various references from listed firms regarding violations related to code of conduct.  However many of such references provide incomplete d...

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday came down heavily on public sector banks (PSBs) for not reducing their lending rates despite liquidity remaining ample, bond yields being at a multi-year low, and policy rates being lowered by 75 basis points (bps) in the past six months.  “Bond yields have come down, policy rates have fallen, the borrowing cost for banks is low, as is evident from softening rates on certificates of deposit (CD), and liquidity is in surplus. I am surprised banks are still not lowering lending rates,” Das told top PSB executives during a meeting, confirmed multiple sources.  According to a statement uploaded on the RBI website, the governor discussed credit and deposit growth amid a slowing economy. Even as credit growth remains muted, the flow of credit to the needy sectors should not be hampered “while following prudent lending, robust risk assessment and monitoring standards”, he said.  Sources said the governor had a word...

The Securities and Exchange Board of India (Sebi) has told the government that recent budget proposals could undermine its role as regulator, particularly with respect to the recommendation that the minimum public shareholding be raised to 35 per cent from 25 per cent. Already, government-owned companies are laggards in raising this level to the current 25 per cent norm, said a senior Sebi official.   “Going forward, this has to go up from 25 per cent to 35 per cent and ensuring compliance would be greatly impacted particularly from PSUs as Sebi has to depend on government for funding,” the official said. FM Nirmala Sitharaman’s July 5 budget proposals require the regulator to transfer its surplus funds to the Consolidated Fund of India (CFI). It will also need prior government approval for its annual capital expenditure plans, she has proposed.   That could lead to a conflict of interest with respect to the regulator having to enforce the shareholding cap and PSUs...