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Low success rate in resolving disputes Tax departments have had a success rate below 30 per cent in dispute resolution, Economic Survey 2017-18 pointed out A whopping 66 per cent of pending cases accounted for only 1.8 per cent of the value at stake and a minuscule 0.2 per cent of cases accounted for 56 per cent of value at stake, showing an adversarial tax regime in the country. The government had in 2016-17 modified the annual appraisal proforma of income tax officials, giving weight to their assessments orders being upheld on appeal. The Survey said collections of direct taxes by states and local governments were significantly lower than those of their counterparts in other federal countries such as Brazil or Germany.Meanwhile, there has been an addition of about 1.8 million individual income tax filers since demonetisation in November 2016, according to the Survey. Measures such as GST and demonetisation have led to an increase in personal income tax collections, substant

Sebi limits trading in security receipts to qualified buyers Sebi’s move aimed at allowing only informed investors to trade in the securities A private placement, rather than a public issue, is the markets regulator’s favoured route to start trading in securities receipts issued by asset reconstruction companies (ARCs).Only certain “qualified buyers” will be permitted to trade in them, and the minimum lot size will be Rs10 lakh. The intention is to allow only informed investors to trade in these securities. A committee set up by the Securities and Exchange Board of India (Sebi) has made these recommendations, and the regulator’s board meeting on 28 December approved them, minutes of the meeting published on the Sebi website on Monday showed.“The offer of Security Receipts (SRs), which are proposed to be listed, may be allowed only to Qualified Buyers through private placement,” the minutes read. Initially, security receipts—issued by ARCs to banks in exchange for some of thei

Labour Ministry looks to add self-employed to job data Employment numbers could increase significantly if a labour ministry proposal to include self-employed people under the Pradhan Mantri Mudra Yojana (PMMY) in the data is implemented. That would give the government's job-creation credentials a boost ahead of the 2019 general election. This proposal comes as a spat has been brewing over a recent report that said 5.5 million people will be added to the Employees' Provident Fund Organisation (EPFO) network in the current fiscal, reflecting employment growth. Critics have said EPFO enrollment doesn't necessarily mean job creation. The PMMY initiative is separate from this and will be the first attempt to capture the number of self-employed people in the country's job data. It is expected to add more than 50 million people to India's existing workforce of nearly 500 million, a senior government official told ET on the condition of anonymity. Out of India'

FRDI Bill’s bail-in clause worries labour ministry Officials say move may impact medical benefits under ESIC The Union labour and employment ministry has raised concerns about the ‘bail-in’ clause — under which bank deposits can be used for helping failing public sector banks (PSBs) to stay afloat — in the Financial Resolution and Deposit Insurance (FRDI) Bill.This is perhaps the first time the clause has drawn flak from within the government, which is facing criticism from other quarters as well. The ministry has represented that a substantial chunk of money kept in fixed deposits of PSBs for providing medical benefits under the Employees’ State Insurance (ESI) scheme to around 30 million employees will be rendered unsafe due to this clause.Union Finance Minister Arun Jaitley had in August last year introduced in the Lok Sabha the FRDI Bill, which proposes a comprehensive resolution framework to ensure that in the case of financial institutions, including banks and insurance c

Govt may bring more amendments in insolvency law The insolvency law might be amended depending on recommendations of the panel reviewing issues related to the legislation, including those pertaining to home buyers, a senior government official said. While everything is timebound under the Insolvency and Bankruptcy Code (IBC), Corporate Affairs Secretary Injeti Srinivas said the issue is how the interests of stakeholders are to be balanced. A 14-member panel, also chaired by Srinivas, is working to identify and suggest ways to address issues faced in the implementation of the IBC — which came into force in December 2016. The Business Standard, New Delhi, 29th January 2018

Resolution plans under IBC may need approval of fewer lenders. The government is debating whether to lower the approval threshold for resolution plans under the Insolvency and Bankruptcy Code (IBC) in a move aimed at preventing too many insolvent companies from going into liquidation.More than 75% of creditors currently have to agree to a resolution plan, implying that just over 26% can reject it and force a company into liquidation. The government feels liquidation should be the last resort and is considering whether such plans can be approved by a two-thirds majority or even a simple majority."There is a need to relook at the current majority requirement. Just 26% members cannot take a company to liquidation," said a senior government official, who didn't want to be named. "We are seeing it as an issue." Many companies that have gone into liquidation could have continued to function under a less rigorous regime, some in the government feel.According to

Finance ministry decides not to recreate an omnibus development bank The word from North Block just before the Budget is that the finance ministry has decided not to recreate an omnibus development bank. Instead with at least one international rating agency having pushed up India’s credit rating, it will push state-owned and supported entities to take advantage of the favourable conditions to raise more money from the market For this purpose, the ministry has cleared a proposal from at least one line ministry to create a specialised financing arm quite like the Indian Railway Finance Corporation. When state-owned institutions raise money from the markets on their own steam to finance their capital needs, those qualify as off-Budget borrowings. Prime Minister Narendra Modi and Finance Minister Arun Jaitley are convinced that even for financing the needs of the soft infrastructure sectors, the same strategy could be applied. This would keep the government borrowing within prudent