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Govt to look at EC´s view on simultaneous polls The Election Commission has advised the Centre that simultaneous elections will mean even if a government fails a no confidence motion, the subsequent elections should elect the House for only the remainder of the five year term.This would apply for state assemblies too. In its written views to the Union law ministry, the Commission has advised that if “there is a situation where the dissolution of the Lok Sabha cannot be avoided”, the five year term cannot be shortened.There will be two alternatives in that case. If the remainder of the Lok Sabha´s term is “not long, there could be a provision for the President to run the administration of the country on the aid and advise of the Council of Ministers”.If the remainder of the term is long, “elections may be conducted and the term of the House should be for the rest of what would have been the original term”. The views of the Election Commission are expected to be discussed by th

Govt knows how to bite the bullet: FM Jaitley defends ´tax on the wealthiest´ Finance Minister Arun Jaitley on Thursday strongly defended the imposition of the long term capital gains (LTCG) tax on listed stocks, saying the Budget proposal was to tax the wealthiest sections of society, He also said that the Budget, in these challenging times, provided Rs 120 billion relief to the middle class, including pensioners and senior citizens. Wondering at the analysis over the tax spooking the market, he said the market movement was due to global cues.“Was the tax also responsible for a fall in Dow Jones?” he asked.The FM´s reply to a general debate on the Budget saw heated exchanges in the Lok Sabha between the treasury benches and the Opposition, particularly the Congress, over the Rafale deal. While Jaitley said the breakup of the deal could not be provided due to security reasons, Congress members said they never demanded segment wise details of the deal. In his speech in the L

No RBI decision on implementing IndAS yet: deputy governor N.S. Vishwanathan RBI deputy governor says the bank has not yet taken a decision on implementing the new accounting standards, IndAS, hinting at a possibility of missing the 1 April deadline Reserve Bank of India (RBI) deputy governor N.S. Vishwanathan on Wednesday said the central bank has not yet taken a decision on implementing the new accounting standards, IndAS, hinting at a possibility of missing the 1 April deadline. Speaking to analysts and researchers during a conference call post the monetary policy, the deputy governor added that the system should be prepared for implementation given that the document was issued two years ago. With less than two months to go and final regulations not yet announced, bankers believe that meeting the April deadline is a challenge. “Preparedness should be there as document was issued two years ago. RBI will decide on implementing IndAS later,” said Vishwanathan, according to an

Developers of affordable homes should not collect GST from buyers: finance ministry The finance ministry clarified that most affordable housing projects attract a 12% GST, the effective rate of which falls to 8% after adjusting for the cost of land, which is not subject to GST . Developers of affordable homes should not collect goods and services tax (GST) from buyers as the effective rate of 8% tax can be met by rebates on the taxes already paid by the developer on the cost of materials, the government said on Wednesday. The finance ministry clarified that most affordable housing projects attract a 12% GST, the effective rate of which falls to 8% after adjusting for the cost of land, which is not subject to GST. Only the value of the house, excluding land, is taxed under GST. Equipment deployed in construction such as capital goods are taxed at a higher rate of 18% or 28%. “As a result, the builder or developer will not be required to pay GST on the construction service of f

MCLR to be linked with base rate The Reserve Bank of India said on Wednesday that it will link the base rate with the marginal cost of funds based lending rates (MCLR) from April 1 to ensure expeditious transmission of its policy rate to borrowers.The RBI introduced the MCLR system from April 1, 2016, on account of the limitations of the base rate regime. “With the introduction of the MCLR system, it was expected that the existing base ratelinked credit exposures would also migrate to the former,” the RBI said inastatement on developmental and regulatory policies. A large proportion of bank loans continue to be linked to the base rate despite the RBI highlighting this concern in earlier monetary policy statements. “Since MCLR is more sensitive to policy rate signals, it has been decided to harmonise the methodology of determining benchmark rates by linking the base rate to the MCLR with effect from April 1,” the RBI said. RBI Deputy Governor NS Vishwanathan said: “We have been

Relief for MSMEs hit by GST The Reserve Bank of India (RBI) has announced two relief measures for micro, small and medium enterprises (MSMEs) by providing them additional time to repay banks, and removing the credit limit on MSMEs in the services sector, which falls under the priority sector. The central bank has instructed banks and nonbanking financial companies (NBFCs) to allow MSMEs registered under the goods and services tax (GST) to repay their dues occurring between September 1, 2017, and January 31, 2018, within 180 days of their due date. This extension is applicable only to MSMEs, which were standard as of August 31, 2017, and for which the aggregate exposure does not exceed Rs 250 million as of January 31. “The formalisation of business through registration under the GST adversely impacted cash flows of the smaller entities during the transition phase, with consequent difficulties in meeting their repayment obligations to banks and nonbanking financial companies,” th

RBI signals long pause, flags inflation risks Five MPC members vote in favour of status quo; one votes for 0.25% rise The Reserve Bank of India (RBI) kept policy rates unchanged for the third consecutive time. Governor Urjit Patel indicated that the recent rise in bond yields was beyond the control of the central bank and a result of fiscal profligacy by the government and the rise in rates in advanced economies. Patel’s post-policy statement assumes significance for interest rates in the economy; particularly when his deputy Viral Acharya said RBI was not there to provide liquidity to manage bond prices. According to bond dealers, the statements indicate the RBI was not interested in yield management anymore and the government will have to heed the market. This could mean a yield push up, which will eventually feed into the bank lending rate at a time when the RBI is working on linking the lending rate to a more market-driven external benchmark. “Now the RBI has made it clea