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Tax Breaks for  Health  Cover Premiums on Cards Health insurance premiums could get larger tax breaks, as the finance ministry has asked the apex body of general insurance firms to examine the proposal for the Budget 2018-19 The government is willing to consider the demand, since health insurance costs have moved centre stage in the policy circles. The Narendra Modiled government is pushing for insurance-based healthcare. While the governments at the states and the Centre subsidised a large percentage of premium for people below the poverty line, costs spike for those above it. Under the National Health Policy 2017, the government is planning to bring a national-level health protection scheme, a key component of which will be cheap health insurance products. There are two areas where the government could intervene through the Budget — it could cut the GST rate payable every time someone buys a health insurance product; or it could also provide a larger income tax set off for th

Agri growth likely to be higher than 2.1%: Ministry The country's agriculture sector is expected to grow higher than projected 2.1 per cent growth by the CSO for the current fiscal, following better rabi crop prospects, the agriculture ministry said on Sunday.Last week, Central Statistics Office (CSO) had pegged farm and allied sector growth at 2.1 per cent for 2017-18, much lower than 4.9 per cent achieved in the 201617. The farm sector growth comprises GVA (gross value added) of crops at 60 per cent, livestock 20 per cent and forestry 8.5 per cent and fishing and aquaculture at 5.5 per cent.The agriculture sector can, therefore, be expected to register a much higher GVA for the year 2017-18, when final estimate figures are released, it added. Justifying the reasons for possible higher growth, the ministry said it is of the opinion that the lower coverage of area by August 2017 on account of delayed onset of monsoons has caused a poor reflection compared to the actual positive

Taxman plans to match GST invoices to plug leakage Move in response to falling GST revenue collection The GST Council may move the sales and purchase invoice matching system to the back end. It will do so to keep tabs on missing transactions and check over-claim of input tax credits in the goods and services tax (GST). At present, assessees claim input credits themselves by filing summary input- output returns, and the tax authorities do not have any clue whether the claims are correct or not. The process of invoice matching was supposed to be done by the assessees, though it was deferred till March. However, slowing GST revenues have now prompted the government to design an alternative mechanism, under which tax officials will do the matching themselves. “Instead of asking taxpayers to match invoices, we may do it ourselves at the back end. We may follow a risk-based approach; when the gross level of transactions does not match, we may match invoices,” an official said, addi

Govt seeks nod for Rs  800 bn PSB recap through bonds Expects to issue these before end of fiscal year The Finance Ministry sought Parliament´s approval to spend Rs 800 billion extra this fiscal year to recapitalise state owned through bonds. Thursday´s move kick starts the Rs 1.35 trillion bank recapitalisation bond programme announced by Finance Minister Arun Jaitley in October to help public sector banks come out of the spiralling nonperforming asset mess.The Rs 800 billion infusion would take place before March 31, officials said. “These bonds will have nonSLR (statutory liquidity ratio) status, and will be non tradable,” an official said on condition of anonymity The SLR isaportion of deposits that banks need to invest in government securities.The SLR status to any instrument provides a traceability option and they can be traded in the secondary market.“The intention is to ensure that banks´ ability to support growth is not diminished Reckless lending by state owned ba

Lenders plan Aircel, GTL Infra merger Look at March 31 as the proposed deadline to initiate the process Lenders to Aircel and GTL Infrastructure have come up with a solution to clear the combined debt of the firms. They are looking at the option to merge the firms so that the new entity gets a stable earning. The lenders are looking at March 31 as the deadline to initiate the merger. This comes after a proposed merger of Aircel with Reliance Communications (RCom) was called off, and banks are left with deteriorating financial health of the company as the Aircel’s shares are pledged with them.The lenders have also asked Maxis, the Malaysian promoter of Aircel, to bring in fresh equity worth at least Rs 40 billion into its Indian arm. Part of the proceeds would be used for the GTL Infrastructure merger and to repay debt. The lenders are staring at huge provisioning as Aircel has failed to repay its debt on time and telecom tower firm, GTL Infrastructure, is in the final stages

RBI may maintain status quo on rates for entire 2018: Experts The Reserve Bank of India (RBI) is likely to keep the key policy rates unchanged in 2018, despite bond yields rising sharply in the past three months.A rate hike might not come in the entire calendar year, economists and bond dealers said, adding a rate cut was not a possibility either The sharp upward movement in yields started in October last year, when the 10 year bond yields stood at around 6.65 per cent.The yields are now at 7.33 per cent. In the same period, the one year overnight index swap (OIS), an instrument used to hedge rates, rose from 6.09 per cent to 6.46 per cent. In a theoretical sense,arise in the OIS rate might indicate rate hikes, but this time the OIS movement was directly influenced by the rise in yields “It is very difficult for the OIS to remain undisturbed when the yields are rising so much.Base case suggests there would be no hike in 2018.The rise in (bond) yields is more about supply and th

Services sector growth improves in December Combined services, manufacturing PMI fastest since demonetisation. India´s economy has a reason to cheer in the New Year with its biggest sector —services —rebounding to growth in December from contraction in November, though the expansion is moderate, according to a widely tracked Nikkei Purchasing Managers´ Index (PMI). With manufacturing sector posting five year high growth in December, the combined expansion in the two sectors was the fastest since October 2016, the month of demonetisation.Higher activities in services led to increased hiring by firms with jobs growth quickening to the fastest since September, the PMI survey of 400 private sector firms showed. However, effects of the goods and services tax (GST) still persist, since a large chunk of the improvement in PMI account delayed payments from previous months, and cash shortage still not abated.PMI for services grew from 48.5 in November to 50.9 in December. APMI above 5