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The RBI board meeting on Monday to finalise its annual accounts, is also likely to take up the Bimal Jalan committee's recommendations on Economic Capital Framework (ECF) along with the dividend payment to the government, sources said.  The committee had submitted its report to the RBI Governor on Friday. The report, which recommends transfer of surplus reserves to the government in a staggered manner over three-five years based on a predetermined formula, may be put on the Reserve Bank of India (RBI) website later for public access.  The RBI follows a July-June financial year and the dividend is usually distributed in August after annual accounts are finalised. For FY20, the government has pegged a Rs 9,000 crore dividend from the RBI. Sources had earlier told IANS that the RBI may start transferring the first tranche of the surplus this calendar, based on the Jalan panel report.  With economy facing a slowdown in key sectors, the government is looking at RBI dividends and sur

President Donald Trump said on Tuesday his administration was considering potential tax cuts on wages as well as profits from asset sales, and sought to play down market anxieties that the world's top economy could be heading for a recession.  Speaking to reporters during a White House visit by Romanian President Klaus Iohannis, Trump said "we're looking at various tax reductions," adding that a "payroll tax is something that we think about."  Recession fears were stoked last week when bond investors briefly demanded a higher interest rate on 2-year Treasury bonds than for 10-year Treasury bonds, a potential signal of lost faith in near-term economic growth.  Trump dismissed fears of a slowdown, extolling low unemployment and a rising stock market over his tenure.  "I think the word "recession" is a word that's inappropriate...We're very far from a recession," he said.  The Washington Post reported a temporary payroll tax cut wa

With an aim to safeguard mutual fund investors from high-risk assets, regulator Sebi wants fund houses to shift all their investments to listed or to-be-listed equity and debt securities in a phased manner and reduce their exposure to unrated debt instruments from 25 per cent to only 5 per cent.  Exposure to risky debt securities has emerged as a major risk for the capital market investors, including those coming through the mutual fund space, and the regulator has been making efforts to enhance its regulatory safety net against such risks.  Taking forward certain decisions approved by Sebi's board earlier in June, the regulator has now finalised the draft amendments to the prudential norms for mutual fund schemes for investment in debt and money market instruments.  Besides, some further amendments have been proposed for approval of Sebi's board at its next meeting later this month, officials said.  A key fresh proposal is to reduce the existing overall limit for investment

The Reserve Bank of India (RBI) will cut interest rates again at its October meeting, making it the fifth in a row, according to economists in a Reuters poll who said the central bank's decision to ease by 35 basis points on Wednesday was right.  While a survey taken ahead of August's meeting showed a 25 basis points rate cut was a done deal, the RBI was expected to keep rates unchanged for the rest of this year.   However, a more recent Reuters poll, conducted Aug 7-8, predicted the RBI would ease its benchmark lending rate by 25 basis points to 5.15% in October. If it does cut again as forecast it would be a repeat of a cutting spree last seen in 2000-01  After the expected October cut, the RBI is then forecast to ease by 15 basis points to a near decade low of 5.00% in the first quarter of next year, although much depends on global conditions.  "India is amidst an economic and financial slowdown with minimal support from fiscal policy. The responsibility is being born

The income tax (I-T) department has relaxed its assessment and scrutiny norms for start-ups.  In a circular it directed its officers not to raise additional tax demands for start-ups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).  This will be done in cases where scrutiny is limited to Section 56 (2) (viib) of the Income Tax Act, or what is called in popular parlance angel tax.  Angel tax refers to income tax payable on capital raised by unlisted firms by issuing shares where the share price is considered more than the fair market value.  “No verification on such issues will be done by the AOs (assessing officers) during the proceedings and the contention of such recognised start-up companies on the issue will be summarily accepted,” the circular said.  In cases where start-ups are recognised by the DPIIT but scrutiny involves wider issues, the I-T Department has asked its field formations not to pursue the issue of the angel tax during the assessm

Reserve Bank of India Governor Shaktikanta Das gave a big push to retail lending by lowering risk weights for consumer lending and raising the bank exposure limits for non-banking finance companies which could directly boost borrowing capacities for top firms.  Housing Development Finance Corp., Mahindra Financial and Chola are among the firms that could benefit from the RBI’s change of rule in regard to banks’ lending to NBFCs.  Permission to classify bank lending to some NBFCs that lend to priority sectors as such would reduce the time taken for transmission which otherwise had to wait for securitisation.  “This will reduce our capital requirements for these loans and increase our risk adjusted returns,” said PK Gupta, managing director at State Bank of India. “Some of these benefits can be passed on to the customer. It could have some impact on rates though we are yet to calculate it. The main reason this was done was because despite an expansion in these loans, delinquencies have

The Reserve Bank of India released the quarterly survey on capacity utilisation (CU), order books and inventories in the industry for Q4 FY19. While CU keeps its six-year-high title this time too, new orders have grown this time, but sales have declined, the survey shows. Expansion in new orders is being seen as an uptick in activity. Improvement in inventory of raw material and finished goods is suggestive of decline in sales in this period, the RBI said. This survey provides a snapshot of demand conditions in India’s manufacturing sector. Business Standard, 8th August 2019