<!– /11440465/Dna_Article_Middle_300x250_BTF –>Rejecting media reports that the PM’s address to the nation at 7:30 PM on December 31, the BJP said that that the speech would go ahead as planned. The BJP Twitter handle tweeted: “Narendra Modi live address to the nation at 7:30 PM on Dec 31: Live streaming and where to watch in India.”Here’s how you can watch PM Modi’s address:Time: 7:30 PM IST on December 31, 2017Watch it on Facebook live on BJP’s pageWatch the live stream on YouTubeCheck it on the BJP websiteYou can also watch the speech on PM Modi’s websiteThe speech will also be broadcast on all TV channels including Zee News. DNA will add the links when the PM speaks. What we know so far? The BJP-led NDA Government, which has come under sharp criticism post the November 8 demonetization drive, will roll out a massive canvassing campaign beginning with Prime Minister Narendra Modi’s address to the nation on December 31.Sources said all Central Ministers have been asked to visit at least 10 places and hold rallies and mass contact event so as to convince the masses about the decision to demonetize high-value currency notes.As many as 10 towns visited by each minister will be mix of rural and urban places and more focus will be on poll-bound states as Uttar Pradesh, Punjab and especially rural areas.In the wake of the realisation in the government that demonetization related problems will continue for some time, a detailed dossier on demonetization issue has been given to all Central Ministers explaining need of the drive to various milestones achieved along with its success stories.All mass media platforms from radio, TV to field publicity will be used.Sources disclosed that around 60-page documents have been distributed to all ministers by the Finance Ministry in which every aspect of demonetization has been described point by point.The Finance Minister in the document has described the need for initiating such a step, future action plan and impact on major policies.Prime Minister Modi had earlier urged the nation to give him 50 days post the demonetization decision to get things back on track. After demonetization, the government has taken a number of steps to ensure that no hardship is faced by tourists and the industry is not affected.Till date, the government has made several changes to the norms.The demonetization decision has also taken a toll on the common man, with reports of some dying while standing in queues to collect money.In between all this, Prime Minister Modi has continued to address the nation at various public gatherings and his ‘Mann ki Baat’ radio programme.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Pakistan has sought the support of United States on the implementation of the Indus Waters Treaty (IWT) with India.US Secretary of State John Kerry had a telephone conversation with Pakistan Finance Minister Ishaq Dar on Thursday. Kerry said that the World Bank President had recently informed him about Pakistan’s complaint against India on the subject of Indus Waters Treaty. Kerry urged for an amicable solution of the dispute between the two countries. “The US would like to see an amicable solution to this issue,” he was quoted as saying.Dar said that the Indus Waters Treaty is an international commitment and it is the responsibility of the World Bank to make sure that India honours this treaty and the water rights of hundreds of millions of people of Pakistan are protected. He said that the Court of Arbitration is a legal requirement and appointment of the Chairman of the Court of Arbitration must be fulfilled by the World Bank.Dar said that the World Bank President had been in touch with him in writing and also on telephone during the current month. He indicated that Washington’s support on the principles and legal position of Pakistan would be greatly appreciated. Kerry also appreciated the improvement in the economic indicators of Pakistan and congratulated Dar on the economic recovery brought about by Islamabad.Dar said that the government after having achieved macro-economic stability is now focused on achieving higher sustainable and inclusive economic growth. Kerry also recalled his association with Senator Ishaq Dar went back to the days when he was Leader of Opposition in the Pakistan Senate.The Finance Minister also warmly acknowledged his association with Secretary Kerry.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Congress Party has accused Finance Minister Arun Jaitley of quoting wrong facts and misleading the people of this country with his statements with regard to demonetization.”It is very surprising that Arun Jaitley is giving such a peculiar statement, saying that there was no unrest, but it has been reported that that more than 100 people have died in the country,” Congress leader Pradeep Bhattacharya.”I cannot believe that Arun Jaitley does not know this thing. Definitely he knows this thing in spite of that he said something wrong and he thought if I say something wrong people will believe it, but now, people have started thinking that he is saying untruth and trying to mislead the people of the country,” he added.Bhattacharya said he can very emphatically and very clearly say that people who have died and those who are suffering due to present situation will never forgive this type of painful situation.Responding to Jaitley’s statement that the people are supporting the demonetization initiative, the Congress leader said, the finance minister clearly knows that people are not supporting them.”What the people would do, people are hesitating, they are showing their grievances very clearly, they have shown it very clearly that that they cannot accept this kind of functioning by the Government of India,” he said.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>The 50-day deadline to deposit the old Rs 500/1,000 notes in banks comes to an end on Friday but the cash crunch and queues before ATMs are likely to continue for some more time as currency printing presses have failed to meet the huge demand for new bills.People, however, will still have time to exchange the currency notes at designated RBI counters till March 31 after giving valid reasons for not depositing defunct notes in their accounts by December 30.The government is also planning to come out with an Ordinance making possession of old Rs 500/1,000 notes beyond a specified limit for numismatic purposes illegal and punishable.Prime Minister Narendra Modi in a surprise announcement on November 8 declared the old Rs 500 and 1,000 notes invalid.The banks started accepting deposits in scrapped notes from November 10. However, a very few ATMs opened on November 11, as most of the machines had to be recalibrated, for people to get cash which was available in Rs 2,000 denomination.Saddled with cash crunch, banks resorted to rationing of valid currency notes and fixed a withdrawal limit of Rs 24,000 per account in a week. Although the overall situation at banks has improved, ATMs still have to do some catching up. Many cash vending machines are still out of cash even after 50 days since demonetization.The government move was sharply criticised by the Opposition parties led by Congress and TMC. With every passing day, the number of circulars from the government or the Reserve Bank kept on rising that led to confusion among bankers as well as the public.Bankers believe that restrictions on withdrawal of cash from banks and ATMs are likely to continue beyond December 30.After the demonetization, the government had fixed a limit of Rs 24,000 per week on withdrawal from bank accounts and Rs 2,500 per day from ATMs in view of the currency crunch.The government and the RBI has not specified when the restrictions will be withdrawn. Finance Secretary Ashok Lavasa had said the withdrawal cap would be reviewed after December 30.
New Delhi: Has the Reserve Bank of India (RBI) under its new governor, Urjit Patel, surrendered its hard-fought autonomy? Many experts feel so, particularly after the manner in which Prime Minister Narendra Modi‘s government has handled the demonetisation drive.
Former Prime Minister Manmohan Singh, also a former governor of the RBI and a finance minister, lamented in Parliament recently that constant modifications in the country’s banking system following demonetisation was not good for the country or the RBI.
“That reflects very poorly on the Prime Minister’s office, on the Finance Minister’s office and on the Reserve Bank of India,” he told the Rajya Sabha last month. “I’m very sorry the Reserve Bank of India has been exposed to this sort of criticism, which I think is fully justified.”
What is unclear in this whole exercise is how much say the country’s central bank — the apex monetary policy authority, established on April 1, 1935, following the enactment of the Reserve Bank of India Act, 1934 — had in the policy decision.
“The government said the RBI has recommended the demonetisation. I do not know whether the government has forced the RBI to ask or the RBI took the call on its own,” RBI’s former Deputy Governor K.C. Chakrabarty told IANS over phone from London.
“I’ll not be able to say (on RBI’s views being valued) unless the minutes of the board meet is shown,” he added, alluding to some interference by the government, since RBI’s position has always been against demonetisation.
“That was the consistent view of the Reserve Bank in the past,” Chakrabarty said.
In a reply to Bloomberg, on a right-to-information query, the apex bank said that the decision to withdraw the legal tender character of the Rs 1,000 and Rs 500 notes was taken by the RBI board at 5.30 p.m. on November 8 — less than three hours before Modi announced it to the country.
Overnight, Rs 15.44 lakh crore or 86 percent of the currency in circulation was declared illegal. Norms were announced by the Prime Minister on how people could deal with such currency in their possession — which were subsequently changed on an almost daily basis.
Regarding autonomy, Chakrabarty said: “You must understand the autonomy that the RBI was getting from the government was because the government was to give the autonomy to the institution. If the government does not want to give anybody autonomy, the RBI cannot do anything.”
West Bengal Finance Minister Amit Mitra was more direct.
“Most eminent people in India have been RBI governors, including the present governor (Urjit Patel). He is a good economist. Now the same autonomous institution has lost its teeth. It has been issuing notices and withdrawing notices as per government’s instructions,” Mitra told IANS.
“What is very dangerous regarding demonetisation has gone unnoticed. The deeper issue is that fundamental institutions of India of historic nature are being undermined and emasculated. Therefore, the faith in them by the people is under question today,” he added.
The money that was declared illegal is yet to be replaced in any substantial measure — at last count, the RBI said Rs 5.93 lakh crore of new Rs 2,000 and Rs 500 have been issued. Since November 10, most ATMs across the country have remained shut and those which do open their shutters run dry of cash very quickly. Bank cash counters have the same woes, despite restrictions on the amount that individuals or companies can withdraw.
Many bankers too seemed to have lost faith on the towering apex institution.
“Yes, the RBI seems to have lost its autonomy in the issue of demonetisation which has been totally mismanaged,” a chief executive of a bank told IANS, declining to be named.
“The RBI should have advised the government on the ground reality about withdrawing 86 percent of the currency notes in circulation and the logistical issues,” he added, suggesting that the central bank should have stuck to its ground.
In fact, Duvvuri Subbarao, former RBI Governor and Finance Secretary, has been rather candid about his relationship with the government and the finance minister (P. Chidambaram at that time) when he was at the helm at Mint Street, the headquarters of the RBI in Mumbai.
“Both have the same objective of growth, but RBI looks at long-term growth and the government looks at short term growth that results in different priorities for both. There is no way out,” Subbarao told IANS.
“It all depends on the chemistry between the finance minister and the governor,” he said.
But experts hope the question of autonomy could come under less pressure, now that a Monetary Policy Committee (MPC) has been named and has started functioning — with three representatives each from the government and the RBI, and the veto power with the Governor.
“I support formation of MPC, though it will curtail the decision-making powers of the RBI Governor,” said Subbarao. “The Governor will discuss and listen to all stakeholders in the committee, so he will not be solely responsible for the decision on interest rates.”
But some domain experts like M.R. Sivaraman, former Union Revenue Secretary and former Executive Director at the International Monetary Fund, don’t think demonetisation exercise, at least, reflects loss of the RBI’s autonomy. On the contrary, they feel it is RBI that should have handled the situation better.
“Demonetisation will curb black money, eliminate fake currency and bring out unaccounted cash stashed away into the banking system,” said former Infosys board member T.V. Mohandas Pai, dismissing suggestions about loss of independence.
First Published On : Dec 29, 2016 19:26 IST
New Delhi: Government today appointed Viral V Acharya, a New York University economics professor who once called himself ‘poor man’s Raghuram Rajan‘, as new Deputy Governor at the Reserve Bank of India.
The 42-year-old Acharya’s appointment for a three-year tenure was cleared by the Appointments Committee of the Cabinet. He is taking over at a time when the central bank is facing criticism for repeated changes in the rules related to deposit and withdrawal of money, post-demonetisation.
He will fill the post that fell vacant after Urjit Patel was made RBI Governor to succeed Rajan with effect from 4 September. The existing three Deputy Governors of RBI are S S Mundra, N S Vishwanathan and R Gandhi.
Like Rajan, Acharya also comes from an academic background and has also co-authored in the past at least three papers with the former RBI governor. These papers included ‘Sovereign debt, government myopia, and the financial sector’, ‘The Internal Governance of Firms’ and ‘Government Myopia and Debt in a Dynamic Setting.
Acharya has often praised Rajan for his works and once said “Raghu has been a great source of inspiration for me”. While giving a Deutsche Bank Prize in Financial Economics plenary lecture in 2013, Acharya had narrated an incident when someone asked him on a flight whether he was Raghuram Rajan, after seeing him, an Indian, with papers on banking and crisis.
He quipped that was the day when he realised that if he had Rajan as a “role model” and could get even 5-10 percent of him, he could have easily passed off as “poor man’s Raghuram Rajan” on flights.
Just like Rajan, Acharya has also been a strong votary of the independence of central banks and favoured them being “democratically accountable, yet be operationally independent from political influence”.
Acharya is known for his research in theoretical and empirical analysis of systemic risks of the financial sector, its regulation and genesis in government-induced distortions, according to the profile on the NYU website.
The research areas also span across credit and liquidity risks, agency-theoretic foundations as well as their general equilibrium consequences, it says.
Acharya is the C V Starr Professor of Economics in the Department of Finance at the New York University Stern School of Business (NYU-Stern).
An alumnus of IIT, Mumbai, with a degree of Bachelor of Technology in Computer Science and Engineering in 1995 and PhD in Finance from NYU-Stern in 2001, Acharya was with the London Business School (2001-08) and served as the Academic Director of the Coller Institute of Private Equity at LBS (2007-09) and a Senior Houblon-Normal Research Fellow at the Bank of England (Summer 2008).
He has also served as Director, NSE-NYU Stern Initiative on the Study of Indian Capital Markets, and has been a member of Sebi’s International Advisory Board.
First Published On : Dec 28, 2016 17:54 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Five kilograms of gold jewellery worth around Rs 90 lakh was allegedly looted at gun point by three unidentified persons from a branch of Muthoot Finance– gold financing company– at Dhoraji town in Rajkot, police said.”Three unidentified persons entered a branch of Muthoot Finance at Dhoraji and looted 4.8 kg gold jewellery at gun point,” Rajkot (Rural) SP Antrip Sood said.Three persons were armed with country-made revolver and knife, and their act was caught on the CCTV camera based on which the police launched a search operation, Sood said.”We have sealed the exit points and have launched a hunt for the robbers with the help of CCTV footages,” he said.The CCTV footages show three robbers armed with revolver and knife forcing the employees of Muthoot Finance at Dhoraji branch to open the locker from where they take out gold jewellery and flee immediately.
New Delhi: Describing the currency being deposited in banks following last month’s demonetisation of high-value notes as money that has lost its earlier “anonymity”, Finance Minister Arun Jaitley on Sunday said these funds now available with the banks have strengthened the Indian banking system.
“The money that is being deposited in cash form after demonetisation, now the anonymity of that money is gone,” Jaitley said at the DigiDhan Mela event here to promote cashless transactions.
“When this money comes into the system, the banking system becomes stronger and there are funds available for rural development, social welfare programmes,” he said.
“Money in the system becomes part of the taxation system too.
The long-term benefit of this move is that the shadow, the parallel economy, which was not taxed, of which there was no accounting, which was not answerable, that is now becoming part of the economic system,” the Finance Minister said.
First Published On : Dec 25, 2016 18:21 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>After demonetization, the government is now trying to fight the ‘demons’ that could come in the way of ensuring a less-cash economy. As part of this exercise, the government is examining a proposal that could lead to sterner action in cheque bouncing cases.With more people using non-cash modes for transactions, the government is facing demands, particularly from traders’ bodies, for a legal system that makes payments made through cheques more secure, according to sources.If the proposal is accepted, the government could come out with a legislation to amend the law pertaining to cheque bounce cases. Among the measures that government is examining is that the defaulter will be given a month’s time, after which, if the matter is not settled, it would attract arrest even before the case is settled, the sources said.At present, dishonour of a cheque, in view of inadequate funds in account, is a criminal offence under Section 138 of the Negotiable Instruments (Amendment) Act, 1881, and can be punishable with imprisonment for a term which may extend to two years or with fine of twice the amount of the cheque or both.Sources said that despite the law, there were several instances when the payee was made to wait to get the money for years after a cheque bounced. There were 18 lakh cases of cheque dishonour pending in courts across the country till 2014 end, according to a reply in Lok Sabha. While Maharashtra topped the list of such pending cases, it was followed by Gujarat, Rajasthan and West Bengal.The proposed amendments to deal with this issue, which are yet to get the final stamp of approval, could be brought in the budget session of Parliament in February. The objective is to cut down litigation and act as deterrent to defaulters.The traders, who traditionally have been BJP supporters, have expressed concerns about the problems of cheque bouncing, particularly at a time when more and more people were adopting non-cash mode of payments, the sources said.Ghanshyam Aggarwal, former co-convenor of the BJP’s traders cell, said traders’ apprehensions on various issues after demonetization, like the problems they faced due to the limit on cash withdrawal have been conveyed to Finance Minister Arun Jaitley.Earlier this year, the government had notified the Negotiable Instruments (Amendment) Bill, 2015, to allow filing of cheque bounce cases in a court at the place where it was presented for clearance and not the place of issue. Litigants had to sometimes travel long distances to different places from where cheques were issued and not honoured.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Loose ends continued to hang even after two days of deliberations by the Goods and Services Tax (GST) Council.Despite long hours of discussions on Friday, the council, which comprises officials and ministers from states and the Union finance ministry, could not approve or clear for introduction in the Budget session any of the four draft pieces of legislation – Central GST, State GST, integrated GST and Compensation Act.It remained split over the compensation to states for the revenues losses from GST rollout, administrative control of taxpayers and a host of other issues. It, however, discussed each clause of CGST separately and discussed them threadbare and agreed that the states would be compensated for revenue losses every two months instead of every quarter as decided earlier.The next meeting will be held on January 3 and 4.Finance minister Arun Jaitley, who heads the council, told the media that the council was “making reasonable headway”.”I am trying my best. I am not going to bind myself to anything. Our effort is to do it as quickly as possible and I think we are making reasonable headway,” he said.Rakesh Bhargava, Director, Taxmann, said it was “unfortunate” that the council could agree on dual control.”It is very unfortunate that the GST Council failed to agree on dual control. In the next meeting, IGST Bill and this issue will be taken up. We hope there will be an agreement,” he said.Yanamala Ramakrishnudu, Minister for Finance and Planning, commercial taxes, Andhra Pradesh, vehemently opposed the Centre’s suggestion to levy cess on some goods to compensate for states’ losses. He proposed that the Centre should fund the states’ dip in revenues from the Consolidated Fund of India.He welcomed the inclusion of fisheries in the definition of agriculture and agriculturists, which will keep fishermen out of the ambit of GST. Bhavna G Doshi, Senior Advisor, KPMG, said that the Centre would have to address the concerns of states on adequate reimbursement.”States are feeling that the cess may not be adequate. That is the point (West Bengal Finance Minister Amit) Mitra raised – that this year is not going to be good, and even the first quarter may not be good. The state may need more compensation as businesses have been hit (by demonetization). His concern was whether there would be adequate funds available (with the government for compensation),” she said.Doshi suggested that the government could consider a “special contingency fund”. Apparently, Mitra has pointed out that in the light of demonetization, resources required for compensation could go up. The government was working on compensation, based on estimated losses of Rs 50,000 crore to states.This, the KPMG expert said, may see more goods and services attracting cess than before. Doshi believes that if the council is able to thrash out all issues in the next meeting, the government may call a special session of Parliament to pass the GST Bills.MS Mani, Senior Director, Deloitte Haskins & Sells LLP, feels the whole compensation discussion was very “hypothetical”.”The assumption is that revenues do not grow in GST, but past experience has shown that revenues will definitely grow under GST. The way I look at compensation is that it is more like underwriting. So, it is not necessary that compensation risk comes true. The compensation may not be as critical as it is being made out to be. I would say that the larger gains from today’s meeting is that on many issues they seem to have achieved consensus,” he said.Mani, however, feels that dual control could be a “difficult issue”. Even Pratik Jain, partner and leader indirect tax, PwC India, believes that the “most contentious issue was the dual control or cross empowerment”.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>In a scathing attack on opposition for stalling Parliament over demonetization, Prime Minister Narendra Modi alleged on Thursday that they were trying to “rescue the corrupt” like Pakistan gives cover fire to terrorists to cross border and said the note ban will expose the ‘kala dhan’ (black money) as well as ‘kale mann’ (ill-intentions) of many. “Many people say I had not taken account the consequences of this huge step. In fact, the only thing that I could not take into account was the brazenness with which many political parties and leaders will come to the rescue of the corrupt.But I am happy that this drive aimed at eliminating ‘kala dhan’ has exposed so many ‘kale mann’,” Modi said. The Prime Minister, who was on his first tour of his Lok Sabha constituency after Rs 500 and Rs 1000 notes were demonetized on November 8, was speaking at a function organised inside the Benares Hindu University campus.Charging the opposition parties, who have been attacking the government over demonetization, with “brazenly standing in support of the corrupt and the dishonest”, Modi compared their stalling of parliamentary proceedings during the latest session to “firing at the borders by Pakistan in a bid to provide cover to infiltrators”.
ALSO READ After PM Modi mocks Rahul’s ‘earthquake’, Congress VP says ‘answer me’He also hit back at former Prime Minister Manmohan Singh and Congress leaders Rahul Gandhi and P Chidambaram, saying their argument that promoting cashless economy was futile due to poverty, illiteracy and electricity not reaching villages in the country “exposes” their own report card. Reacting to his predecessor Manmohan Singh’s assertion in the Parliament that a cashless economy was not feasible for the country where nearly 50% of people were poor, the Prime Minister said, “I wonder whether he was giving his own report card by admitting the dismal situation. After all, he has not just been the Prime Minister for two terms and a Finance Minister previously. Since the 1970s he has been holding key positions”.Taking on former Finance Minister Chidambaram over his assertion that online transactions could not find wide acceptance in India since nearly half of its villages were not even electrified, Modi said “whose faults is he pointing at. Did I uproot electric poles or snap cables in villages which had electricity”.
ALSO READ Manmohan Singh exposing his own misdeeds, says PM ModiHe also took potshots at Rahul Gandhi’s assertion that payments through cards, online transfers etc. would face hurdles in the country due to low literacy levels, saying, “I hope he does not say that I had indulged in some sort of black magic to make illiterate those who knew how to read and write. “He never thinks before he speaks and he may not have realized that he has admitted the failure of the long reign of his own party.”Calling himself “Kashi ka bachcha” (a child of Kashi), Modi said, “I am, nonetheless, delighted to see that the power of this holy land has made me work and forced detractors to admit, even if unwittingly, their failures”. Urging the people to have patience in the face of the inconveniences which have ensued demonetization, Modi said, making use of a metaphor, “The stench of a garbage heap becomes unbearable when a cleanliness drive starts. But if we persevere and remove every bit of filth, we can build a beautiful garden on the clean spot”.
ALSO READ Rahul Gandhi hits back at Modi, says mock me, but answer questionsReiterating the need to move towards a “cashless economy”, Modi said “once black money is eliminated from the system, it is essential to ensure that fresh black money is not generated. Net banking, mobile banking and payment through cards is the way forward”. Earlier, the Prime Minister laid the foundation stones for a cancer research centre and a super specialty hospital and stressed on the need for “not just health insurance but also health assurance wherein the poorest of the poor have access to the best possible treatment and medicines”.Modi, who also interacted with artistes performing a stage play “Chanakya”, hailed the political and economic thought of the ancient Indian strategist saying “so many ideas have come and gone but he remains as relevant as ever”. Offering words of appreciation for the ongoing “Rashtriya Sanskritik Mahotsav” (national cultural festival at BHU), Modi said, “Art must be a part of our life and artistes must get due respect since it is art alone that can prevent human beings from becoming like robots which have intelligence but no sensitivity.”The Prime Minister was speaking in the presence of Union Ministers Mahesh Sharma and Anupriya Patel.
New Delhi: The Goods and Services Tax (GST) Council will on Friday, the second day of its ongoing seventh meet, discuss the vexed issue of cross empowerment or dual control of assessee jurisdiction under the pan-India indirect tax regime, said informed sources.
“The issue of dual control is laid out in the agenda of this ongoing seventh Council meet. It will be discussed tomorrow (day-two),” Finance Ministry sources told IANS.
The solution to the critical issue has eluded consensus over six previous meetings of the GST Council.
Day one of the two-day Council meet ended on Thursday with no discussion on dual control but discussed the GST bills, the source added.
The three GST bills – Central GST (cGST), Integrated GST and State Compensation Law – need to be approved by the Council before they can be tabled in the Parliament.
The deadlock on the issue in the GST Council has raised questions on the targeted implementation date of 1 April, 2017 for the indirect tax regime.
Finance Minister Arun Jaitley has been emphasising that the luxury of time is not available for the GST implementation for the reason that if 1 April, 2017, is the first possible day it can be implemented, then the last date also is constitutionally defined as 16 September, 2017.
“So the discretion as to when to implement is only five months and 16 days and that’s why we don’t have the luxury of time because after five months, the curtains will come down on the old taxation powers,” Jaitley had said earlier.
With a serious question mark over the April 1 target, now that the legislations could not be tabled in the winter session, the plan appears to be to have GST come into force by default when the time given by the constitutional amendment will automatically expire for roll out of the new indirect tax regime.
First Published On : Dec 22, 2016 19:41 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Three out of four economists summoned by the Standing Committee of Finance headed by Congress MP Veerappa Moily, expressed deep anxiety and concern towards the demonetization being pursued by the Bhartiya Janata Party. Noted economists Kavita Rao, Professor at National Institute of Public Finance and Policy, Pronab Sen, former Chief Statistician to the government of India and Mahesh Vyas, CEO, Centre for Monitoring Indian economy were critical of the demonetization process whereas Rajiv Kumar, senior fellow, Centre for Policy Research argued for it in front of the committee. “This committee will submit its report on demonetization on the first day of the Budget Session of the Parliament,” said a member of the committee on the condition of anonymity.Sources confirmed to WION-DNA that the experts questioned how the conversion of cash economy into digital would take place within the confined time declared by the central government. All three economists who expressed concern on demonetization spoke on the issue of counterfeit currency, inflation and black money. The above mentioned economists argued in the committee that a lot of unaccounted black money does not exist in cash and is parked in other sectors of the economy. Sources also confirmed that three economists said that currency reform might end up spiking the inflation instead of reducing it. Lastly, it was also argued that for a meaningful war against black money, the government should denotify a part of the currency every two years.The Committee has decided to call Urjit Patel, Governor, Reserve Bank of India and members of the Indian Banking Association on January 19, 2017. The meeting was also attended by former Prime Minister Manmohan Singh.Even the Prime Minister Narendra Modi is expected to meet the economists on December 27 to discuss the state of the economy. The economists in the first half of the day will meet the Finance Minister Arun Jaitley and spend the second half with the PM. Since the exercise has become politically contested, every opinion of experts in this field counts both for the government and the Opposition.
Patna: The Bihar government on Wednesday paved the way for providing benefits of the 7th Pay Commission to the state officials and pensioners by announcing the setting up of a fitment committee for the purpose.
The decision to this effect was taken at a meeting of state Cabinet presided over by Chief Minister Nitish Kumar in Patna.
The three-member fitment committee would be headed by retired bureaucrat and former state Chief Secretary GS Kang while Secretaries of Finance and Rural Works Department Rahul Singh and Vinay Kumar respectively will be the members, Principal Secretary, Cabinet Coordination Department Brajesh Mehrotra told reporters.
The committee would be asked to submit its report in three months, Mehrotra said.
There are around 4.5 lakh employees under Bihar government and 3.5 lakh pensioners who will get the benefit of new pay scale.
Ever since announcement of the 7th Pay Commission benefits for the central government employees, demand for similar benefits for the Bihar government have been coming.
The state Cabinet at its meeting today approved 20 proposals of different departments.
In another important decision, the Cabinet gave its nod to a proposal of the Home Department to enhance honorarium of SAP (State Auxiliary Police) personnel.
While junior commissioned officer of SAP would get a monthly honorarium of Rs 20,700 now in place of Rs 18,000 earlier for jawans the hike would be Rs 17,250 from Rs 15,000, Mehrotra said.
The cabinet also gave its nod to a proposal of state Civil Aviation Department to hire a new 7+2 seater helicopter on wet lease for five years at a cost of Rs 93,15,00,000.
First Published On : Dec 21, 2016 22:25 IST
The Reserve Bank of India (RBI) has done well by removing restrictions on deposits above Rs 5,000 for the remaining days of this month when the deadline to surrender old, invalidated currency expires.
Though Wednesday’s RBI notification is silent on the reasons for reversing the move, it is obvious that the decision is triggered by widespread criticism against its earlier directive that required anyone who wanted to deposit over Rs 5,000 in old currency to face questions by two bank officials on why he/she didn’t do it earlier.
Even if one makes multiple deposits that add up to more than Rs 5,000, the restrictions would have kicked in.
This was a breach of promise and lacked logic as this writer said in an earlier Firstpost column.
The new RBI notification, which says the old directive will not apply for KYC compliant accounts, would mean that almost all genuine customers will escape the unnecessary scrutiny, since majority of bank accounts are now KYC compliant. The only exceptions, perhaps, are Jan Dhan accounts which were opened with loose KYC norms and fraudsters.
The Rs 5,000 limit was absurd looking at the purpose (tackling tax cheats) from any angle. Any large deposit in any kind of account should naturally trigger scrutiny by bankers and taxmen to check likely money laundering. For this the government and the RBI didn’t need to trouble all customers and bank officials at a time when the common man is already feeling the pain of an artificial cash crunch.
Besides, such a restriction contradicted the repeated promises of Prime Minister Narendra Modi and Finance Minister Arun Jaitley that people do not need to rush to bank branches to deposit their old currency since there is time till 30 December.
In hindsight, the many flip-flops by the RBI and the government show the lack of planning and coordination among the top authorities who handle the demonetisation implementation. There are reasons to believe that the central bank isn’t in control of the situation and experts have pointed fingers at the erosion in the credibility of the central bank, an institution that is known for its ability to drive the economy through even worse phases with skill and conviction.
It was clear the Rs 5,000 deposit rules will hit the common man hard. Those who would have waited for the queues at the banks to get shorten to deposit their old currency savings, were taken by surprise with this rule. Remember, a number of time rules have changed for the common citizens on cash withdrawals and deposits. Last month, the government had abruptly stopped the currency exchange facility at bank counters after initially promising until 30 December. Bankers, at one point, even inked customers to ensure people don’t withdraw cash beyond certain specific limits, reminding one of war-time rationing. All this created more panic and confusion among the public.
Demonetisation, in the scale the Narendra Modi government has undertaken (pulling out 86 percent of the currency in circulation), has no parallel among major economies.
The entire world is watching this episode in India as a rare case study of a botched up economic reform plan. No one has a clue on where this is taking the Indian economy – the fastest growing major economy in the world – in the days ahead. In this backdrop, there is a closer scrutiny on the Indian central bank and government by global economy watchers and investors on each and every stage of demonetisation.
Here frequent flip-flops in rules only does damage to the credibility of the economy and its political and economic institutions.
As of now, there are a few missing links in the demonetisation plan that the central bank needs to clarify, including the number of new Rs 500 and Rs 2,000 notes printed, giving guidance to the public on until when the cash crunch will last and what is the cost of the exercise to the economy.
Except for assurances there is enough cash in the system, the RBI hasn’t offered specific details of the currency operation that is underway to ease panic. The RBI assurances do not reflect on the ground as still ATMs run dry and bank branches ration money. So far, since the 8 November demonetisation announcement, there have been 60 circulars issued by the finance ministry and the RBI. This points to a lack of planning and hold of the situation.
The RBI should make up its mind and guide the economy and the general public through this uncertain phase. Though demonetisation began as a political decision, the responsibility to ensure that this does not harm multiple spheres of the economy equally lies with the central bank which is the authority of monetary policy and currency in circulation. It’s high time the RBI came out of the trance and took control of the situation.
First Published On : Dec 21, 2016 15:24 IST
In a fresh twist to the government’s previous announcement on cash deposits in the banks, the Reserve Bank of India has issued a fresh notification, withdrawing restriction on Rs 5,000 deposits for KYC compliant account holders.
The fresh notification by the RBI, following a massive public backlash, comes just two days after the central bank had said individuals can deposit over Rs 5,000 in old currency bills only once until December 30 and that too after explaining why it had not been done so far.
The central bank said that on reviewing its notification of December 19, it is advising banks to withdraw the two conditions for fully KYC-compliant accounts.
After banning old Rs 500 and Rs 1,000 notes on 8 November, the government had allowed all of the cash holdings with any person to be deposited in bank accounts till December 30.
There was no limit on the quantity or value of the junked notes that could be deposited. However, the government on 17 December issued a gazette notification putting restrictions on deposits henceforth.
On 19 December, the central bank had said that now-defunct notes in excess of Rs 5,000 shall be credited to only KYC-compliant accounts and if the accounts are not KYC-compliant, credits may be restricted up to Rs 50,000 subject to the conditions governing the conduct of such accounts.
The equivalent value of specified bank notes tendered may be credited to an account maintained by the tenderer at any bank in accordance with standard banking procedure and on production of valid proof of identity, the RBI had said.”The equivalent value of specified bank notes tendered may be credited to a third party account, provided specific authorisation therefore accorded by the third party is presented to the bank, following standard banking procedure and on production of valid proof of identity of the person actually tendering,” it added.
The above restrictions shall not apply to tenders of SBNs for the purpose of deposits under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.
Meanwhile, in a notification, the Finance Ministry had said: “There shall not be any limit on the quantity or value of the specified bank notes that are tendered for payment and deposit made under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016”.
With PTI inputs
First Published On : Dec 21, 2016 13:29 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>It’s been over six weeks since November 8, when the unthinkable happened. In one fell swoop, PM Modi delegitimised Rs 500 and Rs 1000 notes in an audacious bid to curb black money. What has happened post that has been nothing short of chaotic. The RBI and the Finance Ministry have literally made up rules on the go, chopping up and changing one arbitrary decision after another. It has been a baptism by fire for them, trying to outdo money launderers and black money hoarders. Unfortunately, hardworking average Indians have been caught in the crossfire. The latest decision to scrutinise any deposit above Rs 5,000 (issued this Monday) has left even the most ardent supporters of demonetization baffled.The Opposition has gone hammer and tongs over PM Modi’s decision, with Rahul Gandhi, Mamata Banerjee and Arvind Kejriwal almost indulging in a game to outdo each other by ramping up the rhetoric against the government. No one can disagree the common people have been greatly disadvantaged by currency swap and that the Opposition parties have tried their best to latch on to it. Yet, something curious seems to be happening in India’s political firmament. Across the states, the lotus continues to bloom unabated, notwithstanding the urban backlash BJP has received. The Maharashtra municipal poll results (till the third phase), by-elections in six states and the latest result from Chandigarh municipal corporation poll shows no signs of the BJP wave slowing down. If anything, it seems to have picked up after a momentary lull. What explains this dichotomy? Let’s look at some of the possible causes.PM Modi’s personal charisma‘Hum to fakir aadmi hai, jhola leke chal padenge’. To a large extent, this statement, made at a rally at Moradabad on December 3, explains Modi’s rustic charm and appeal among his core vote base. He is looked upon as an honest crusader against corruption, with no family to pass on wealth to or curry favour for. This is in stark contrast to the general dynasty-centric political norms in India, where often lineage and not ability dictates a person’s post in an organisation. The appeal of a quintessential outsider embarking on a Himalayan shake-up is too irresistible for a large section of the urban population, who had so far equated politicians with a staid pace of work and a penchant for amassing wealth. Modi offers a refreshing change in that regard and many are giving him the benefit of doubt for at least trying to change the system, notwithstanding the gigantic loopholes in the implementation. If the 2014 mandate demanded a big bang shake-up of the status quo, Modi has provided it via demonetization. Schadenfreude among common peopleThe German word ‘schadenfreude’ refers to the pleasure derived from someone else’s pain. The reaction to demonetization has been a textbook case of this. People have stood in line for hours and yet not complained, thinking that the wealthy must be suffering a lot more. The fault lines between the poor and the rich have always been stark, hence demonetization has been hailed as a great leveller. This is something PM Modi has managed to sell well by essentially branding the move as a pro-poor step meant to tighten the screws on the unscrupulous rich. Whether it has happened in reality or the rich have managed to give them a slip is immaterial. The perception lingers and that’s what matters in politics.‘Nation building’ in the age of hashtag activismIn another example of potent political messaging, the PM has managed to convey that all the hardships faced by the common man would not be in vain. In fact, it is an important path of nation building, a sacrifice of few hours for the greater good. To paraphrase PM Modi, this is the line to end all the queues of the past 70 years. At a time, when cyber warriors are in abundance, trolling people for not conforming to their set of beliefs, demonetization gives them the validation of not merely being hashtag activists. ‘If the soldiers can stand guard in Siachen, why can’t you stand in line?’ has been an oft-repeated argument in the last couple of weeks. For many who can’t ever think of joining the army or performing a similar level of sacrifice, standing in a queue for the sake of the nation is a quick path to patriotic nirvana.Shifting goalpost has helpedThe government has constantly shifted its goalpost about what exactly the main objective of demonetization is. From the initial thrust of eradicating black money and counterfeit currency, the focus has shifted to promoting digital economy. An aggressive PR campaign has meant that the real issues have been obfuscated. The government has managed to remain unscathed so far without quite revealing what it has gained from the entire exercise. Public reaction may take a turn for the worse when Q3 results of industries and other related economic indices are released in January 2017.Opposition’s unconvincing tiradeFrom day 1, some of the major allegations the Opposition has raised have been about how BJP workers and leaders were in the loop and how businessmen close to BJP were taken into confidence before the decision was announced publicly. Many accusations have been hurled but none have stuck so far, owing to the lack of any tangible proof. Merely calling demonetization a scam doesn’t make it one without any clear evidence. The Opposition may have lost out on a trick here by questioning the intent of demonetization rather than its merit. Sorry state of CongressThe present and future of the principle Opposition party, Congress, remains bleak like a moonless night. In many states, the party remains radar-less without an empowered state unit. With a top heavy structure providing no coherent leadership, Congress has islands of influence of local satraps. It doesn’t have any organised plan to counter BJP’s rampage. Congress was supposed to gain in Chandigarh, but fell by the wayside. In Maharashtra, BJP is making inroads in Congress’ deepest bastions. Punjab is its best shot in the next batch of elections, which will take place in 3-4 months. Yet the party looks wobbly, unsure of its next move. It has given BJP the breathing space to commit a few mistakes of its own without getting severely penalised. The BJP-SAD alliance is widely expected to lose Punjab and yet it managed to increase its numbers in the Chandigarh municipal polls. While it would be wrong to over-analyse the data, owing to the absence of AAP which didn’t take part in the elections, one thing is for sure. BJP-SAD is not a spent force in Punjab, and Congress and AAP can only ignore the ruling alliance at their own peril. In a border state like Punjab, where terrorism, drugs and counterfeit currency are big causes of concern, demonetization may even have a positive effect on voters as it is likely to crack down on these burning problems.Can BJP continue this momentum into the five state polls in 3 months time? A lot will depend on how quickly the system normalises post December 30. The PM asked for 50 days to get rid of black money. The citizens of India seem to have given its ‘pradhan sevak’ that grace period, but patience may run out soon.It doesn’t take a genius to figure out that demonetization hits a section of dedicated BJP voters badly— the trader community and the urban upper class. Yet PM Modi has used his courage of conviction to implement the scheme. Only the future will tell if he can upend all political calculations and end up with a new larger voting block, steadfastly supporting his decisions. That will be no less radical than the decision of demonetization itself.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Terming demonetization a “monumental tragedy” and an “anti-poor” measure, former Finance Minister P Chidambaram today said whoever planted the idea should enrol in an undergraduate course in economics.”I don’t think demonetization is a reform. It is a monumental tragedy which is anti-poor and has put millions in misery and hardships,” he said at an event at the Mumbai University. By demonetization, the Modi government created a myth that all cash is black money and all black money is cash, he said. Stating that the government did not know, either before November 8 or afterwards, the estimate of the black money in the system, Chidambaram said it is akin to a surgeon carrying out an operation without doing homework.”It is like a surgeon operating upon a patient without knowing whether the patient has any disease at all, which part of the patient is affected and what kind of surgery is required,” the former minister said.Asserting that all cash is not black money, the senior Congress leader said black money is the income that has evaded tax, and there are large sections of the people who have cash but who do not evade income tax.Agricultural income is not subject to taxation, income of charities is exempted, as is the income of religious trusts.Also, the people of Northeastern states do not have to pay income tax and they have cash in hand, he said. “Is that all black money? Is the money in the hands of farmer black money?” he asked. “I think whoever planted the idea of demonetization did not know elementary economics. He should be asked to enrol in an undergraduate school of economics,” Chidambaram quipped. If a farmer has some cash in hand, it is not black money, but when he pays, say, Rs 1,000 as fees to a doctor or a lawyer and does not get a receipt, then this Rs 1,000 becomes black money, Chidambaram said.But if the doctor or lawyer goes to a restaurant and buys a meal and the restaurateur gives him a bill for Rs 1,000, then the same Rs 1,000 note again turns ‘white’, he said. “People who did not understand the elementary economics have authored demonetization,” he said, adding that all the Rs 15.44 trillion of banned notes will come bank to banks by December 30. Demonetization was the worst thing that could have happened to the economy as it crippled the farmers, self-employed, small businessmen and daily wage earners. “It is an unmitigated tragedy…certainly has nothing to do with economic reform,” he said. Demonetization is generally resorted to only in two circumstances, Chidambaram said. “One, when there is hyper inflation…you demonetize your currency because it is worthless. Secondly, when there is currency instability and to bring about stability, you demonetize,” he said.”We are in the distinguished company of Zimbabwe, North Korea, Libya and now Venezuela (which demonetized currency). Do you want India to be in the company of these countries?” he asked. As long as there is demand for black money, it will be generated, he said. “demonetization is no answer for black money. The answer is to stamp out corruption, stamp out the sources which generate black money,” Chidambaram said. The sectors which demand black money are construction, jewellery, licensing and permission granting, he added.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Senior Congress leader and former Finance Minister P Chidambaram said the new GDP series based on gross value added, which shows a growth of 7-7.5 per cent, is “flawed” as it is based on a “statistical illusion”, and claimed the country is expanding at just 5-5.5 per cent. “GDP estimates are flawed. If you go by simple measurement, the way it is measured, gross value addition at 7-7.5 per cent, appears to be correct, but it is inconsistent with every other economic indicator that we have,” Chidambaram said at an event at the Mumbai University. As per the new GDP reading based on GVA, the economy grew at 7.2 per cent in the first half of the current fiscal.While the GDP clipped at 7.3 per cent in Q1, in the second quarter ended September it expanded at 7.1 per cent. He said other economic indicators that we should look at include credit growth, which is now at a 20-year low, core sector growth, that is only about 2-2.5 per cent, and investment, which is at an all-time low. “I go by harder numbers – credit growth, investments, stalled projects. Those are hard numbers, real numbers and I think those are the numbers we should look at. Looking at these numbers, my gut feel is that we are growing at about 5- 5.5 per cent a year,” the Rajya Sabha member from Maharashtra said.He said the GVA number at 7-7.5 per cent may be statistically correct but does not reflect the true growth of the economy. He said this number is constructed by using the deflector, which many people have seriously questioned, and there is a “statistical illusion” in this number. Citing an example, Chidambaram said, “Raghuram Rajan (former RBI Governor) pointed out that exports minus imports adds to GDP. We all know exports in 2015-16 was lower than 2014-15.”Exports declined but imports declined more. Therefore, exports minus imports in 2014-15 was say number A and exports minus import in 2015-16 is B. Exports declined and imports declined even further but B is larger than A shows growth. Therefore, B upon A shows growth,” said the former Finance Minister. He said there are lot of conundrums in this and hence he does not go by these numbers.
New Delhi: The central government plans to set a threshold criteria for political parties to enjoy tax exemptions to check money laundering by outfits that do not contest elections, Finance Minister Arun Jaitley said.
Jaitley said the revenue secretary has been asked to look into the issue in the wake of Election Commission’s recommendations
in this regard. Jaitley’s remarks at a Times Now event assume significance in the context of the Election Commission’s recommendations to the government to amend laws to bar tax exemption to parties that do not contest elections and win seats in Lok Sabha and Assembly polls and to ban anonymous donations above Rs 2,000 to political parties.
“I can point out one is invisible donation which Election Commission says is anonymous and the second is when political parties got exemptions. There are about 40/50/60 political parties which effectively contest elections in Centre and the states, (but) you have a large number of political parties which got registered not for contesting election but for availing tax exemption,” he said.
“Now this part is easier to tackle. I have already asked the revenue secretary to look into this and therefore we will have to put a threshold criteria so that we are able to eliminate those which are not real political parties but only for money conversion which have come in,” Jaitley said.
He said many political parties do not contest elections but only accept donations and convert money. “I have already told the Revenue Department to look at them and therefore some threshold criteria could be fixed and number of these could be eliminated,” Jaitley added.
First Published On : Dec 20, 2016 22:25 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Some of the harsher critics of PM Modi and the BJP tend to claim that neither of them have ever read a book. It’s an elitist argument made either by eminent historians or disillusioned veterans who can’t get used to change of guards and appears untrue based on the events proceeding the November 8 announcement because someone out there seems to be a huge Kafka fan.The sheer number of rule changes since November 8 has left all of us feeling a little like the bank cashier Josef K, the protagonist of The Trial, who was unexpectedly arrested by unidentified agents for an unspecified crime and then underwent a trial without knowing his crime. Or maybe sitting somewhere in a dark corner, cashier Josef K’s real-life counterpart is just messing with the rest of us to right the wrongs he faced in a fictional world.So far, the sheer number of rule changes and announcements from the institutions involved in demonetization – the RBI, Finance Ministry and PMO – has made us wonder whether they really had a plan in place. The only reason, this hasn’t descended into complete chaos is the charisma of a Prime Minister who the people of this nation trust to do the right thing. But that doesn’t mean it hasn’t become exasperating. The latest rule change in the great demonetization game (at the time of writing) came in the form of a cryptic circular from the Reserve Bank of India (RBI) on December 19 stated that we’d only be given one opportunity to deposit amounts greater than Rs 5000 before December 30. In the RBI’s own words: “The credit in such cases shall be afforded only after questioning tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage.” In a stroke of one press release, amount under scrutiny was brought down from a staggering Rs 2.5 lakh to a paltry Rs 5000. No matter which way you put it, this sounds a lot like having to explain to two faceless bank officials why one didn’t deposit money before December 30 even though we’d been clearly told we had all the time in the world to deposit our notes. The PM in his November 8 address had clearly stated: “Persons holding old notes of 500 or 1,000 rupees can deposit these notes in their bank or post office accounts from 10th November till close of banking hours on 30th December 2016 without any limit. Thus, you will have 50 days to deposit your notes and there is no need for panic.”In the same vein, Finance Minister Arun Jaitley had said on November 12: “Don’t rush to the banks right now, for exchanging or withdrawing old Rs 500 and Rs 1000 notes as there are massive crowds. Wait for a few days as the scheme is open till December 30.”That we must ‘explain’ our own money to faceless officials is quite worrisome and in some ways, is reminiscent of an era of licence raj when a morally ambiguous official’s arbitrary judgement could mean the difference between getting work done and going home empty-handed. And given the spate of adventurism of bank officials and babus, who’ve proven to be the weakest link in the demonetization drive, what’s to say a person can’t deposit their money or hide their ‘audit trail’ after giving a little under the table.As if that wasn’t enough confusion, Arun Jaitley’s press conference later that night showed that the FinMin and RBI have all the communication skills of a newly married couple as he said: “If they go and deposit with bank any amount of currency no questions are going to be asked to them and therefore the 5000 rupee limit does not apply to them if they go and deposit it once. “But if they are going to go everyday and deposit some currency, same person, that gives rise to suspicion that where is he acquiring this currency from. In that event a person may have something to worry about. Therefore everyone is advised whatever old currency you have please go and deposit it now,” he said. And since there is no scope now for earning any old currency because all exemptions have been waived, it makes sense to go deposit all the holding in one go, Jaitley said. “This is the objective of the order passed today.”Law and IT minister RS Prasad went on to cause further confusion when he said: “They (RBI) have issued something, the government will come with structured response on that.” And this wasn’t just talk as a colleague realised as she had to explain why she had Rs 6,000 to 10 different people. It really leaves you wondering what’s next. Show proof that one has sung the nation anthem with gusto at a movie theatre before depositing the money? Prove that one has shared at least five Facebook posts praising the Indian Army?Politics and policy implementation is about perception and even though the intentions behind demonetization are well-meaning, the implementation has left us all bewildered. In some ways, PM Modi’s November 8 speech now feels a lot like Neo’s address to the machines at the end of The Matrix where he tells them: “You’re afraid of change. I don’t know the future. I didn’t come here to tell you how this is going to end. I came here to tell you how it’s going to begin.” It seems even the institutions involved in demonetization only knew how it was going to begin, and have absolutely no clue how this is going to end.
Political activist and academic Yogendra Yadav has given an explanation to his bank that many harried customers, now hurrying to the bank, would want to give to their banks for making delayed deposits.
In the hard hitting declaration he submitted while making a “small deposit”, Yadav has said that he was waiting for the queues to end to approach the bank and that he saw no reason to offer any special explanation for his decision.
“I see no reason to offer any special explanation for the same [for making the deposit now]. I normally like and wait for the queues to end. I was assured by the Prime Minister,the Finance Minister and the RBI that there was no need to rush to the banks and that I had till 30 December for making any deposit. I believed them,” Yadav has said in his crisp letter.
Yadav’s explanation comes a day after the finance ministry and RBI brought out a notification saying that the customers can make deposits worth more than Rs 5,000 of old Rs 500 and Rs 1,000 notes only once until 30 December now and that they will also have to explain why they did not do so before hand.
Later on Monday finance minister Arun Jaitley had clarified that the customers need not give explanations if they are making the deposits in one go. He said bank officials will question only if a customer is making deposits repeatedly.
Explaining the rationale behind the move, the finance ministry had said the decision was taken as “it is expected that, by now, most of the people would have deposited such old notes in their possession”. However, one reason, which was not mentioned in the release but is widely known, is the government’s suspicion that a few tax evaders may be laundering their ill-gotten wealth before the deadline ends by using proxies to make deposits in banks.
There is also assumption that the government may be trying to reduce deposit gathering at banks after the demonetisation, which has already surpassed all estimates. Going by the pace of deposit accrual, there are fears that the final number may prove the entire demonetisation exercise a futile one as a higher-than-expected figure would mean return of the black money into the system.
The latest directive, however, came as a shock to many as it goes against the promise that Prime Minister Narendra Modi gave while making the demonetisation announcement on 8 November. He had then said that nobody needs to panic as there is time until 30 December to make deposits of old Rs 500 and Rs 1,000 notes. This promise was repeated in many government advertisements and also by other ministers to calm down the public.
Those honest customers who waited patiently until the queue shortens at the bank branches are now at the receiving end of the new directive. Read in this context, Yadav’s explanation is bang on.
First Published On : Dec 20, 2016 17:22 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>About 72,000 dormant accounts in public and private banks came to life in the first 17 days of demonetization with more than Rs 2,000 crore cash deposited in them. Topping the list was India’s largest public sector bank State Bank of India (SBI) with deposits of Rs 586 crore, reveals official data.The average deposit in the 72,000 accounts is Rs 2.79 lakh, a notch above the Rs 2.5 lakh limit specified by the government, according to the Financial Intelligence Unit, a specialised agency that works under the Finance ministry.Tasked with monitoring suspicious bank transactions, FIU had closely scrutinised accounts in the period between November 8-25 and found that dead accounts—those that had not been active for the last two years—had suddenly sprung to life after the government withdrew high currency notes.Almost every bank, public and private, had accepted such deposits, reveals the data accessed by DNA.While SBI heads the list, Punjab National Bank (PNB) follows second with Rs 230 crore being accepted in dormant accounts. UCO Bank (Rs 154 crore), Bank of Baroda (Rs 116 crore) and Bank of India (Rs 105 crore) are the others in the top five. Amongst the private banks, ICICI is at the top with Rs 51 crore followed by Axis Bank (Rs 36 crore) and HDFC (Rs 9 crore).The largest dormant deposit was found to be in Surat where one individual deposited Rs 3 crore in HDFC. Amongst the other stand-out transactions that have come to light is that of a garment trader depositing Rs 1 crore without quoting a PAN number in the Tirupur branch of PNB.The main intent behind declaring an account dormant or dead is to reduce the risk of frauds. Segregating these accounts leads to bank staff getting alerted to the risks involved and the due diligence needed.But after demonetization, some people are allegedly depositing unexplained cash in these zombie accounts, an expert explained.Recently, in a high profile meeting of tax officials, the Central Board of Direct Taxes (CBDT) took note of 500 suspicious accounts where more than Rs 15 lakh cash was deposited.The government has started analysing where the higher-than-expected deposits came from and how they got into the system. Banks and their staff could face intense scrutiny, and possible penalties if irregularities are found, an official said.The banks did not respond to emails and repeated messages.
Dehradun: Ahead of the Uttarakhand assembly elections next year, the state government has decided to implement recommendations of the 7th Pay Commission from 1 January, official sources said.
The decision, which will benefit around 2.5 lakh government employees and pensioners, was taken in the state cabinet meeting headed by Chief Minister Harish Rawat on Saturday.
The government employees will get the benefit of the 7th Pay Commission from January 1 next year, they said. The arrears for this year will be paid after the finalisation of the procedure for the same.
As a result of the cabinet’s decision, the treasury will have to bear a burden of Rs 3000 crore, they said. The decision to implement the 7th Pay Commission recommendations for government employees of corporation and public venture will be taken by their board and Finance Secretary Amit Negi has been assigned responsibility in this regard.
Dehradun-Haridwar-Rishikesh have been declared metropoliton cities and a consent to make a detailed project report for metro has been given to the Delhi Metro Rail Corporation (DMRC).
The state government also posed a penalty of Rs 2 crore and Rs 2.5 crore for PG doctors for violating bond of 5 years with the state for essential service.
First Published On : Dec 18, 2016 17:10 IST
New Delhi: An inter-ministerial team, headed by a Joint Secretary in the Home Ministry, will visit Tamil Nadu next week to assess the damage caused by the massive 12 December cyclone. The team, headed Praveen Vashistha, Joint Secretary (LWE), in the Home Ministry, will be accompanied by senior officials of Ministries of Finance, Agriculture, Rural Development, Industries, HRD etc., and visit different cyclone-hit districts of the state, official sources said.
The delegation will assess the damage caused by the cyclone to agriculture, industries, infrastructure and other sectors and submit its report to the central government. On the basis of the report, the central government will fix the compensation amount and provide financial assistance to the state concerned, sources said. At least 18 people were killed when cyclone Vardah hit Tamil Nadu and Andhra Pradesh on 12 December.
The cyclone, that triggered strong winds of nearly 100 kmph, uprooted hundreds of trees and disrupted power supply lines besides land and air transport, throwing normal life out of gear. Around 13,000 people had to take shelter in 100 different locations to escape the fury of the massive cyclone.
First Published On : Dec 18, 2016 15:47 IST
New Delhi – Finance Minister Arun Jaitley on Tuesday hinted at lower direct and indirect tax rates in the future as demonetisation results in higher tax revenues from unaccounted wealth coming into system.
He also warned of a “very heavy price” that unscrupulous elements will have to pay for amassing large amounts of cash unlawfully, saying agencies are keeping a close eye on cash accumulations.
The 8 November announcement by the government to demonetise high value notes has in one stroke junked 86 percent of the currency in circulation and holders of the discontinued notes can deposit them in banks before the end of the year and withdraw money in new currency.
The money being deposited has to be accounted for and taxes paid – 50 percent on voluntary disclosures of unaccounted money and 85 percent for any failures.
“So much money…operating as loose cash in the system has today come into the banking system,” he said. “It has to be accounted for. Where taxes have not been paid will now be recovered.”
Jaitley said future transactions would be substantially digital as India moves towards a less-cash society.
“Once they are substantially digital they get caught in tax net,” he said. “Therefore the future taxation level would be much higher than what is currently being collected. This would also enable the government at some stage to make taxes more reasonable which will apply to both direct and indirect taxes.”
Demonetisation together with other reforms, particularly the GST and the restrictions on cash spending subjected to PAN declaration, will bring down the levels of corruption in
society, he said.
“It is going to bring down cash transaction in society and it’s going to bring down levels of evasion as far as taxation is concerned,” he said.
Jaitley said it has come to the notice of the government that some unscrupulous people, including some in the banking system and others, have been trying to subvert the system once again and have accumulated large amounts of cash unlawfully.
“Obviously there is a breach of law in this and this is a step which hurts the economy. And therefore all agencies have an eye on this. They will investigate this matter and all those who are indulging in this malpractices will have to pay a very heavy price for what they are doing,” he added.
First Published On : Dec 14, 2016 08:43 IST
New Delhi: Launching a scathing attack on Congress, Finance Minister Arun Jaitley on Tuesday said the party’s “scandalous record” is making it extremely uncomfortable with the Modi government’s anti-corruption campaign of which the demonetisation of high value currency is a cornerstone.
Junking of old Rs 500 and Rs 1,000 notes, he said, will help the world’s fastest growing major economy to move towards less cash economy and digital payments that will help shore up tax revenues and check evasions.
Besides, restrictions on cash spending together with mandatory furnishing of PAN will help bring down the level of corruption, he said, adding that the transient problems arising from demonetisation are being addressed by rapidly replacing the junked currency with valid banknotes.
Amid daily barbs by Congress vice president Rahul Gandhi against Prime Minister Narendra Modi, Jaitley said the party during its 10 year continuous rule from 2004 to 2014 did not take a single step either against corruption or black money.
Corruption scandals — ranging from 2G spectrum scam to coal block allocation to Commonwealth Games to deal with AugustaWestland for procuring VVIP helicopters — peaked during the UPA regime, he alleged.
“Each of the scandals which is even today discussed in public space belongs to that period. Given this scandalous record, it is not surprising that Congress party is extremely uncomfortable with anti-corruption campaign that the NDA led by Narendra Modi has launched,” Jaitley told reporters here.
High denomination notes, as percentage of total currency in circulation, increased from a mere 36 percent to over 80 percent during UPA regime, he said in oblique reference to ill-gotten money usually being hoarded in high denominations.
“There are economic costs of dealing in cash, there are social costs of dealing in cash. These are the costs which system has to bear,” he said.
Demonetisation, he said, is part of the system overhaul by the NDA government.
“It is our strategy that from high cash dominated economy we should become a less cash economy where the amount of paper currency comes down,” he said.
Cash will exist but there would be greater digital payments.
“Notwithstanding some transient problem which people have to face, we are now rapidly completing remonetisation exercise. Everyday RBI is injecting a large amount of currency into the banking system as part of its remonetisation exercise. Significant amounts are going to be injected in next three weeks which are gradually bringing the pressure down,” he said.
As more and more of the new currency comes into circulation and re-circulated in the banking system, ATMs will make it increasingly available, Jaitley said.
On the advantages of the demonetisation move, he said a large volume of cash has come into the banking system and taxes will be recovered wherever they are not paid.
“Future transactions would be substantially digital and once they are substantially digital they get caught in the tax net. Therefore the future taxation level would be much higher than what is currently being collected,” he said.
It would also enable the government at some stage to make taxes more reasonable which will apply to both direct and indirect taxes, he said.
Also, the banking system will have a lot more cash, which will boost its ability to support the economy with low-cost lending.
“Obviously with all these advantages the social cost also on the system will go down. Therefore, the cash used for bribery, for counterfeit currency, for terrorism, for evading taxes itself will go down,” he said.
Taken together with other reforms particularly the proposed Goods and Services Tax (GST) and the restrictions on cash spending subjected to PAN declaration, it is going to “bring down the levels of corruption in society”, he said.
“It is going to bring down cash transaction in society and it’s going to bring down levels of evasion as far as taxation is concerned,” he said.
Stating that the government is ready for a debate on the demonetisation issue in the Parliament, he urged the Congress and other opposition parties to “rise above slogans and look at the positive advantages that this change is going to bring to the economy as a whole”.
“Therefore, from national perspective, I would appeal to the opposition to join this campaign rather than create obstruction and fail to understand what the real purpose and the import of this campaign really is,” he said.
First Published On : Dec 13, 2016 15:41 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>“I have done my calculations. Your problems will be eased post December 30”, assured PM Modi at a rally in Gujarat. This deadline of things going back to normal is probably the only thing Modi has kept constant since the demonetization decision was announced on November 8. “Give me 50 days and the problem of black money will be solved,” was his impassioned plea. Since then, the goalpost of demonetization has been largely shifted to promoting cashless economy, but PM Modi runs the risk of a serious credibility loss by sticking to the December-end deadline of easing all pains owing to cash crunch.According to Reuters estimates, it will take at least three months to replenish the 86% volume of Indian currency that were made invalid post demonetization. While the withdrawal limit for banks per week is Rs 24,000 per account, most banks are unwilling to give an amount greater than Rs 10,000 due to lack of cash. The problem continues unabated in varying degrees across the country. Even the Supreme Court has asked for the Centre’s reply in this matter. While the Attorney General may believe ATM queues have shortened considerably, the picture from different parts of the country are in stark contrast. IIP data for October (pre-demonetization) shows contraction owing to weak manufacturing numbers and is likely to get only worse. Most rating agencies have cut India’s GDP growth rate owing to low consumption.The likes of Larry Summers, Manmohan Singh and Kaushik Basu have warned of a cascading effect of this economic turbulence with looming fears of job losses and slowdown. The only glimmer of hope comes from Morgan Stanley which believes India’s economy will be back on track in April, 2017. Amidst all these grim predictions, one wonders whether PM Modi is guided by false hope or a wrong set of advisors about the possible economic fallout and the severity and longevity of it. The hope is to trust that PM Modi has the rare insight which many of the pre-eminent economists are missing. Even his Finance Minister believes it will be a couple of quarters before the economy picks up. A note ban of this extent in an economy like India has never been done. Hence, there is no available data or model to properly estimate the extent of demonetization. One also can’t ignore that many of the eminent economists failed to predict the 2008 crisis. So, Modi may still beat the odds. PM Modi’s December 30 deadline is based on two promises. One is that people’s hardship would be eased beyond that and second, these 50 days will be a body blow to black money racketeers. Whether hardship has eased will be judged by the voting public by their personal experiences. So far, the government hasn’t promised publication of tangible statistics, that will reveal the amount of black money tracked in this entire exercise. PM Modi has anchored this audacious demonetization scheme using his personal charisma and integrity to the hilt. People have been largely appreciative, despite suffering hardships. The schadenfreude of the rich suffering is too alluring for the poor and the middle class to let go off. But even a successful marketing campaign has its limitation and expiry date. The unquestioned support towards demonetization among a large section of population has already started to waver, seeing the innumerable flip flops by the RBI and Finance Ministry, looking to implement a new rule everyday. But post December 30, people will like to see some actual results to convince themselves that all these countless hours of lining up for cash were worth something.The entire digital push is commendable, but as an FT commentator says, was the entire process too much, too soon? A tight schedule for changing the fundamentals in a country as big as India looks daunting if not impossible. The amount of cash seizures in new notes (close to Rs 100 crore) means there is a systemic rot in the banking system and clearly a nexus exists between unholy bankers and traders. The government has to urgently plug the loopholes or else the entire mission behind demonetization will go to waste. The message currently being received is the big fishes are getting away and the lesser mortals are facing the brunt. PM Modi may have sold the dream well, but will the gullible mass get a rude reality shock will only be known in the New Year. And BJP may just face the wrath in the elections. PM Modi’s high stakes gamble is increasingly looking shaky.
The past year-and-a-half or so has seen several instances of very prompt action having been taken against some civil society organisations (CSOs) based on suspicions and allegations of violations of the Foreign Contribution (Regulation) Act (FCRA). On the other hand, now we have a situation where a high court has held two organisations — which for all practical purposes, can be considered to be CSOs because these are neither government nor corporate business organisations — actually guilty of having violated the FCRA as far back as 28 March, 2014, and actually “directed” the Union of India to “take action as contemplated by law… within a period of six months”.
But, all the Ministry of Home Affairs — the administering authority for implementing FCRA and which took very prompt and stern action against other CSOs — did, as far as is known as a result of an RTI application, was (a) to write a letter to the Ministry of Corporate Affairs asking for “names of companies falling under the category of ‘foreign source’, who have donated to political parties, namely, Indian National Congress and Bharatiya Janata Party, during the years 2006-7, 2007-8, 2008-09 and 2009-10 and 2010-11,” and (b) forward the response of the Ministry of Corporate Affairs to the Election Commission of India.
If it sounds strange and mysterious, read on.
Having discovered that the BJP and the Congress had accepted donations from an electoral trust which, on removing the ‘corporate veil’ twice, was found to be actually controlled by a company registered in a foreign country, a CSO and a retired secretary to the Government of India, filed a public interest litigation in the Delhi High Court requesting that action under FCRA be taken against these two political parties since political parties are expressly banned from accepting donations from foreign sources by the FCRA. It was in response to this petition that the Delhi High Court pronounced its judgment on March 28, 2016, mentioned in the opening paragraph above.
Not having taken action commensurate with the offence, and after the two political parties had filed appeals in the Supreme Court, against the high court’s decision, the government of the day attempted, albeit unsuccessfully, to amend the FCRA to get the two parties off the hook. This has been described in this column earlier.
It was during the hearings of those appeals in the Supreme Court on 22 and 29 November that the lawyers appearing for the BJP and the Congress to withdraw their appeals against the High Court order. It was widely reported in the media that the senior counsel appearing for the BJP and the Congress said that their clients had obtained clarifications from the government in the light of the amendment made in 2010 to the FCRA. The parties did not intend to pursue their appeals in view of the government’s assurance, …It was further reported that “Under the 2010 amendment, the government had relaxed the norms for political parties for receiving donations from foreign companies wanting to discharge their corporate social responsibility.”
Let us look at the “amendments made in 2010 to the FCRA”.
The FCRA was first enacted in 1976. It came to be known as FCRA 1976. In 2010, it was replaced by a new Act the preamble to which said “An Act to consolidate the law to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto.” The Act passed in 2010 came to known as FCRA 2010.
The “amendments made in 2010 to the FCRA” referred to by the “senior counsel appearing for the BJP and the Congress” seems to be a misunderstanding or loose description. An exact rendition would most likely be amendments made “to the FCR Act of 2010 in 2016. There are two reasons for saying so. It is better to present them in the reverse chronological order.
The FCRA 2010 was amended as part of the Finance Bill 2016, surreptitiously, according to some commentators, and this amendment reads as follows:
“In the Foreign Contribution (Regulation) Act 2010, in section 2, in sub section(1), in clause (j), in sub-clause(vi), the following proviso shall be inserted with effect from 26 September, 2010, namely:
‘Provided that where the nominal value of share capital is within the limits specified for foreign investments under the Foreign Exchange Management Act, 1999, or the rules and regulations made thereunder, then, notwithstanding the nominal value of the share capital of a company being more than one half of such value at the time of making the contribution, such company shall not be deemed a foreign source’.”
The second reason explains why amendment of FCRA 2010 was considered so critical that it was made part of the Finance Bill 2016. A key paragraph of the Delhi High Court judgment of March 2014 says, “The interpretation of the term “foreign source” as defined under Section 2(1)(e) of the Act lies at the heart of the present controversy and begs for judicial consideration” (italics added).
It needs to be pointed out that Section 2(1)(e) of the 1976 Act became Section 2(1)(j) of the 2010 Act when the FCRA was revised in 2010, and that both these sections are identical. The reason for amending only one clause of this section is that it is this particular clause that qualifies Vedanta, Sterlite, and Sesa as “foreign sources” according to the Delhi High Court judgment.
It is important to note that what the “amendment” done in 2016 to the 2010 Act changes is “section 2, in sub section(1), in clause (j), in sub-clause(vi)” of the Foreign Contribution (Regulation) Act 2010. This is important because of what the very second paragraph of the Delhi High Court judgment of 28 March, 2014, which was challenged by the two parties, says. This is reproduced below:
“Since the writ petition drew attention to donations made to politicalparties for the period up to the year 2009, we record at the outset that ourconcern is not with the Foreign Contribution (Regulation) Act, 2010 which has come into force on September 26, 2010. Our discussion of the legalposition would be with respect to the Foreign Contribution (Regulation) Act,1976.”
The sagacity of the Delhi High Court judges has to be admired that they clarified this issue right in the beginning of the judgment, in 2014 itself when further amendment of the FCRA 2010 possibly could not have been predicted.
It should not be necessary to point this out to anyone that since FCRA 2010 did not exist in 2009 when the donations in question were made and accepted, the law in existence at the time of performance of the illegal action would apply and that was, and remains, FCRA 1976. Would it not be outrageous if an offence committed in 1980, for example, were to be tried under a law which came into force only in 2012? It is unbelievable that the senior lawyers representing the two parties had not read or were not conscious of the implications of the second paragraph of the Delhi High Court order that they were challenging. Why they chose to argue this way remains a mystery but it seems plausible that this may well have been the reason for withdrawal of the appeals.
It should not be hard to imagine what would have been the response of the home ministry if a CSO had been held guilty of having violated the FCRA. This is what shows that political parties, although neither government nor business organisations, are not being treated at par with other, mortal, CSOs, since no action is taken against them even after a high court has found them unambiguously guilty of having committed an offence against the law of the land.
Now that the high court judgment has, in a way, been reaffirmed, all eyes are on the home ministry to see what action does it take and when. A former secretary to the Government of India has already written to the home ministry to de-register the two parties.
Whether political parties are actually covered by the law of the land, like other CSOs, should be known soon.
First Published On : Dec 12, 2016 08:11 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Railways has decided to increase passenger fares for raising its resources in order to create a special safety fund. The proposal for total grant of funds for creation of the same has been rejected by the Finance Ministry, sources said. According to the new plan, a safety cess will be levied to generate funds for strengthening track and upgrading signalling system and elimination of unmanned level crossings among other safety-related works to prevent mishaps.Earlier, Railway Minister Suresh Prabhu had written a letter to Finance Minister Arun Jaitley seeking Rs 1,19,183 crore to create the special Rashtriya Rail Sanraksha Kosh for undertaking various safety works. Sources said the proposal has not been accepted by the Finance Ministry which has asked railways to raise its own funds by increasing fares.The Finance Ministry has, however, agreed to provide 25 per cent of the total amount required for creating the special safety fund.“Though, the Railway Minister is not in favour of raising fares at this juncture when passenger bookings are falling and fares of AC-2 and AC-1 are already on higher side, the reluctance of Finance Ministry to provide a bail-out package has left the minister with no option,” a source said.According to the plan, the cess on Sleeper, Second Class and AC-3 will be higher while it will be marginal for AC-2 and AC-1. Though, a final decision in this regard is yet to be taken and modalities are still being worked out, sources said.
By Manoj Kumar
| NEW DELHI
NEW DELHI India is likely to miss a self-imposed deadline to launch the Goods and Services Tax (GST) from April after a meeting of federal and state officials ended on Sunday without deciding who would administer the tax.Central and state finance officials failed to resolve their differences amid acrimony over Prime Minister Narendra Modi‘s shock decision last month to abolish high-value banknotes in an attempt to combat tax evasion, forgery and corruption.The officials agreed to meet again on Dec. 22, Finance Minister Arun Jaitley said after talks in New Delhi on Sunday, pushing back a possible deal beyond the current session of parliament, which ends next week.The long-awaited GST would turn Asia’s third-largest economy into a single market for the first time, broaden the tax base and make life simpler for businesses that now pay a host of federal and state levies.
Jaitley said the government remains hopeful of implementing the new law from April 1, but officials said the GST is likely to be delayed by at least three months because the passage of legislation would slip.At Sunday’s talks some states raked up the issue of compensation for revenues they fear losing after the launch of the tax, as well as the economic shock from Modi’s crackdown on the cash economy, which has caused huge disruption to people’s daily lives and to businesses.
Calling demonetisation a “tsunami” that had hit economic activity across the country, West Bengal Finance Minister Amit Mitra has said that the government should consider deferring the launch of new sales tax.Under a constitutional amendment that enabled the GST, India needs to roll out the new sales tax in Sept. 2017 when the old system of indirect taxation is due to lapse.
Jaitley does not favour dual agencies auditing and scrutinising each taxpayer, saying that multiple authorities could end up acting at cross-purposes, but states are reluctant to relinquish their role. (Editing by David Goodman)
This story has not been edited by Firstpost staff and is generated by auto-feed.
First Published On : Dec 11, 2016 22:20 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Senior AIADMK leader C Ponnaiyan on Saturday said that the party will unanimously choose a new chief for the party. Ponnaiyan told ANI, “Soon the party will decide a new chief to serve the people of Tamil Nadu. I think there will not be any election for this post.”He added, “The party remained united under Amma and will follow same in coming days. We’ll unanimously choose a candidate for the party.”New Chief Minister of Tamil Nadu O Panneerselvam, who assumed office following the demise of J Jayalalithaa, held a Cabinet meeting on Saturday at the State Secretariat. The meeting began at 11.30 am. Panneerselvam is expected to adopt a resolution to accord formal sanction for a suitably impressive memorial for Jayalalithaa. The Chief Minister is yet to formally take his seat in his office at the Secretariat. Panneerselvam took oath as the next Chief Minister of Tamil Nadu after Jayalalithaa breathed her last at 11.30 pm on December 6 at Apollo Hospital in Chennai. The oath-taking ceremony took place at Raj Bhawan.Panneerselvam served as the Leader of Opposition during the DMK government in 2006. He has previously held the portfolio of Finance in every AIADMK government.Meanwhile, several advertisements hailing Sasikala as the successor of Jayalalithaa in the party were reportedly inserted by a section of AIADMK functionaries in Tamil evening newspapers.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>New Chief Minister of Tamil Nadu O Panneerselvam, who assumed office following the demise of J Jayalalithaa, will hold a Cabinet meeting on Saturday at the State Secretariat.The meeting will begin at 11.30 am as per the All India Anna Dravida Munnetra Kazhagam (AIADMK) party sources. Panneerselvam is expected to adopt a resolution to accord formal sanction for a suitably impressive memorial for Jayalalithaa. Meanwhile, the Chief Minister is yet to formally take his seat in his office at the Secretariat.Earlier, the Union Cabinet met under the chairmanship of Prime Minister Narendra Modi and condoled the death of Jayalalithaa who passed away on December 5 at Chennai’s Apollo Hospital. Panneerselvam took oath as the next Chief Minister of Tamil Nadu after Jayalalithaa breathed her last at 11.30 pm last Monday at Apollo Hospital in Chennai. The oath taking ceremony took place at Raj Bhawan. Panneerselvam served as the Leader of Opposition during the DMK government in 2006. He has previously held the portfolio of Finance in every AIADMK government.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Prime Minister Narendra Modi handpicked a trusted bureaucrat, little known outside India’s financial circles, to spearhead a radical move to abolish 86% of the country’s cash overnight and take aim at the huge shadow economy.Hasmukh Adhia, the bureaucrat, and five others privy to the plan were sworn to utmost secrecy, say sources with knowledge of the matter. They were supported by a young team of researchers working in two rooms at Modi’s New Delhi residence, as he plotted his boldest reform since coming to power in 2014.When announced, the abolition of high-value banknotes of Rs 500 and Rs 1,000 rupees came as a bolt from the blue. The secrecy was aimed at outflanking those who might profit from prior knowledge, by pouring cash into gold, property and other assets and hide illicit wealth.Previously unreported details of Modi’s handling of the so-called “demonetization” open a window onto the hands-on role he played in implementing a key policy, and how he was willing to act quickly even when the risks were high. While some advocates say the scrapping of the banknotes will bring more money into the banking system and raise tax revenues, millions of Indians are furious at having to queue for hours outside banks to exchange or deposit their old money.Labourers have also been unpaid and produce has rotted in markets as cash stopped changing hands. Not enough replacement notes were printed in preparation for the upheaval, and it could take months for things to return to normal. With India’s most populous state, Uttar Pradesh, holding an election in early 2017 that could decide Modi’s chances of a second term in office, there is little time for the hoped-for benefits of his cash swap to outweigh short-term pain.Modi has staked his reputation and popularity on the move. “I have done all the research and, if it fails, then I am to blame,” Modi told a cabinet meeting on November 8 shortly before the move was announced, according to three ministers who attended.
DIRECT LINE TO MODI Overseeing the campaign, with support from the backroom team camped out at Modi’s sprawling bungalow in the capital, was Adhia, a top finance ministry official. The 58-year-old served as principal secretary to Modi from 2003-06 when he was chief minister of Gujarat state, establishing a relationship of trust with his boss and introducing him to yoga.Colleagues interviewed by Reuters said he had a reputation for integrity and discretion. Adhia was named revenue secretary in Sept. 2015, reporting formally to Finance Minister Arun Jaitley. In reality, he had a direct line to Modi and they would speak in their native Gujarati when they met to discuss issues in depth.In the world’s largest democracy the demonetisation was revolutionary: it called into question the state’s promise to “pay the bearer” the face value on every banknote. At a stroke, Modi scrapped money worth 15.4 trillion rupees ($220 billion), equal to 86% of cash in Asia’s third-largest economy.The idea is backed by some economists, although the speed of its implementation is widely seen as radical.”One is never ready for this kind of disruption – but it is a constructive disruption,” said Narendra Jadhav, a 31-year veteran and former chief economist of India’s central bank who now represents Modi’s party in the upper house of parliament. Modi, in his TV address to the nation, cautioned that people could face temporary hardship as replacement 500 and 2,000 rupee notes were introduced. Calling for an act of collective sacrifice, he promised steps to soften the blow for the nine in 10 Indians who live in the cash economy.
“BIGGEST, BOLDEST STEP” Immediately after the address, Adhia sent a tweet: “This is the biggest and the boldest step by the Government for containing black money.The boast harked back to Modi’s election vow to recover black money from abroad that had resonated with voters fed up with the corruption scandals that plagued the last Congress government. Yet in office, he struggled to keep his promise.Over more than a year, Modi commissioned research from officials at the finance ministry, the central bank and think-tanks on how to advance his fight against black money, a close aide said. He demanded answers to questions such as: How quickly India could print new banknotes; how to distribute them; would state banks benefit if they received a rush of new deposits; and who would gain from demonetisation?The topics were broken up to prevent anyone from joining the dots and concluding that a cash swap was in the offing. “We didn’t want to let the cat out of the bag,” said a senior official directly involved. “Had people got a whiff of the decision, the whole exercise would have been meaningless.”Under Adhia’s oversight, the team of researchers assembled and modeled the findings in what was, for it, a theoretical exercise. It was made up of young experts in data and financial analysis; some ran Modi’s social media accounts and a smartphone app that he used to solicit public feedback.Yet for all the planning, Modi and Adhia knew they could not foresee every eventuality, and were willing to move swiftly. The announcement caused chaos, with huge queues forming at banks when they reopened after a short holiday. New 2,000 rupee notes were hard to come by and barely any new 500 rupee notes had been printed. India’s 200,000 cash dispensers could not handle the new, smaller, notes and it would take weeks to reconfigure them.Filling ATMs with the 8 trillion rupees ($117 billion) in new banknotes that the finance ministry reckons are needed to restore liquidity to the economy is even trickier. In a best-case scenario, in which India’s four banknote presses churned out new 500 and 2,000 rupee notes designed to replace the abolished ones, it would take at least three months to hit that target.SECRECY PARAMOUNTSecrecy was paramount, but clues had been left. Back in April, analysts at State Bank of India said that demonetisation of large-denomination notes was possible. The Reserve Bank of India, the central bank, also disclosed in May that it was making preparations for a new series of banknotes that were confirmed in August when it announced it had approved a design for a new 2,000 rupee note.The printing presses had only just started turning when the media finally started to run with the story in late October. “The plan was to introduce it around Nov. 18, but there was a clear sign that it could get leaked,” said one person with direct knowledge who, like others interviewed by Reuters, asked not to be named due to the sensitivity of the matter.Some officials in the finance ministry had expressed doubts about scrapping high-value notes when the idea came up for discussion. They now feel resentment at the secrecy in which Adhia rammed through the plan on Modi’s orders. They also say the plan was flawed because of a failure to ramp up printing of new notes ahead of time.Other critics say the Adhia team fell prey to a form of “group think” that ignored outside advice. In the words of one former top official who has worked at the finance ministry and central bank: “They don’t know what’s happening in the real world.”
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Guess which city has registered the maximum transactions in Jan Dhan accounts? No, it’s not Delhi, Kolkata or even financial capital Mumbai but Jaipur, which has Rs 47,201 crore in the accounts. This amounts to 87 per cent of the Rs 53,770 crore all-India transactions, in the first two weeks of demonetization. The Rajasthan capital has emerged the top centre for filtering old currency from November 8-22, reveals data from the Financial Intelligence Unit (FIU), a specialised agency that works under the Finance ministry to monitor suspicious bank transactions. Kolkata, with Rs 720 crore deposited in the same period, and Delhi, with Rs 197 crore, follow far, far behind. Moreover, Jaipur has seen 30,542 of the total 35,000 transactions across India. Jaipur is followed by Kolkata, New Delhi and Chennai. Of these 30,542 transactions, 11,000 transactions do not have PAN (permanent account number), ministry sources told DNA.The revenue department is working on the FIU data to take action against ‘unexplained’ depositors. Income-Tax (I-T) department sources added that they have started sending notices. B Class cities like Haldwani are seeing Rs 7-8 crore every day, it is learnt. Agents who were active in Delhi and other metro cities came to Jaipur every day to collect money, said a prominent hardware and sanitary shop owner in Jaipur. “The going rate is Rs 80 (in new currency) to Rs 100 (old currency),” he added on condition of anonymity. A Jan Dhan account holder said that people were ready to convert black money into white on a commission of 20 per cent. With the government declaring that deposits up to Rs 2.5 lakh would not be questioned, there are instances of Jan Dhan account holders being enticed to put the money and keep a percentage when they finally withdraw it.Launched on August 28, 2014, under the Pradhan Mantri Jan Dhan Yojna (PMJDY), Jan Dhan accounts can have deposits of up to Rs1 lakh a year. Accounts that don’t adhere to Know Your Customer (KYC) norms have a lower limit of Rs 50,000. Of the 25.51 crore Jan Dhan accounts, 5.86 crore have no money in them. However, there has been a surge since November 8 when the government withdrew high denomination notes. Kolkata-based Saeeda Laieek is the top Jan Dhan account holder, with Rs 58 lakh, followed by Jasbir Singh of Delhi with Rs 33.4 lakh, shows data from November 8-22. In his recent public rallies, Prime Minister Narendra Modi has been telling the poor to not allow the misuse of their Jan Dhan accounts. He said in Moradabad that those who had deposited money this way should not return it. Unofficial sources had earlier said that West Bengal led the pack of states that had seen the highest deposits in the first fortnight of demonetization. But FIU data suggests that that might not be the case.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Criticising the government’s move to demonetize old Rs 500/1,000 notes, West Bengal Finance Minister Amit Mitra said India could lose as much as Rs 4.7 lakh crore in its GDP.”We may also lose Rs 4.7 lakh crore in our GDP,” he said in an interview to Karan Thapar on India Today news channel. The old high denomination notes were demonetized from November 9. Since then, long queues are being witnessed at bank branches and outside ATMs for cash withdrawal. “Just imagine for Rs 400 crore of supposedly fake money, according to the government itself, you kill or demonetize over Rs 14.5 lakh crore or may be Rs 15 lakh crore.”I mean what kind of policy is this. Another serious question, we recently saw some new fake money, I am told according to reports. What does this mean. This is horrendous,” the West Bengal minister said. Mitra said the government’s decision to demonetization the will provide no gain, but only acute pain. He also said the demonetization “is perhpas the biggest scam that is about to happen”. “If these figures (deposits of old notes in banks) are right because what it seems to me is if all the money comes back there was not enough black money… “This has two serious implications. One, it could be that the government was purely ignorant because it does not consult anybody…or they have in effect facilitated some people from converting black into white, effectively ending up with no RBI surpluses,” he said.
New Delhi: BJP on Wednesday accused the Congress and Trinamool Congress (TMC) of stalling parliament on “manufactured anger” over the demonetisation and asserted that people have stood like a rock behind Prime Minister Narendra Modi in his decision against black money.
Passing a resolution at its parliamentary party meeting which was attended by Modi and other senior leaders, BJP also hailed the masses for their support despite facing inconvenience and claimed that the situation has now considerably eased out.
Hitting out at Congress and TMC, the saffron party in the resolution said that the opposition parties are not sure what they want and holding up the proceedings of the House by engaging in competitive disruption.
“By their poor arguments, they risked, if anything, being on the side of the black money holders, the Congress kept shifting the goal-post, to justify their obstruction of the House,” BJP said.
The party further said it agreed to opposition’s demand for intervention by Prime Minister during the debate on monetisation and said Modi came to both Houses.
Stating that government is willing for debate, BJP said Home Minister Rajnath Singh in Lok Sabha and Finance Minister Arun Jaitley in Rajya Sabha have assured both Houses that Prime Minister will participate and intervene in the debate.
The Congress party is confused on demonetisation issue and does not know what it stands for. It has even contradicted itself, the BJP said.
Almost daily, the Congress and the Trinamool look the other way even as their members engage in boisterous sloganeering in the well of the House. Parliament suffers as result, the resolution added.
First Published On : Dec 7, 2016 19:06 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>AIADMK will head for a split as J Jayalalithaa’s close confidante Sasikala Natarajan will take over the reins of the party and not allow newly-elected Chief Minister O Panneerselvam to function independently, senior BJP leader Subramanian Swamy claimed. “AIADMK will not survive as a single entity. Sasikala Natarajan will be the head of the organisation and will not give Panneerselvam a free hand and she will ultimately find somebody from the family for the post,” Swamy said. The BJP leader said Panneerselvam also has no base in the party nor does Sasikala posses any political “acumen”. Yesterday, two hours after the announcement of Jayalalithaa’s death, in a swift political transition, her loyalist Panneerselvam was sworn in as CM at a sombre ceremony at the Raj Bhawan along with all the ministers in the erstwhile Cabinet. Panneerselvam had stepped into her shoes twice earlier when she was convicted in corruption cases.As Finance Minister, he was given charge of the portfolios held by Jayalalithaa after she was admitted to Apollo Hospitals on September 22.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Senior BJP leader Subramanian Swamy on Tuesday said his party needed to blend development with Hindutva and a “promising fight against corruption” for electoral victory even as he deprecated the way demonetization exercise was being implemented.Swamy said he supported the idea of demonetization, but not the way in which it was being implemented. The senior Rajya Sabha member, a known critic of Finance Minister Arun Jaitley, criticised the Finance Ministry for lack of preparation before undertaking the exercise, saying an economist should helm it. “Economic development is a must, but you can win the polls (even) if the economy is flattened,” Swamy said speaking on ‘Desh Ka Mudda’ (The issue before the nation) on ‘Agenda Aaj Tak’.To back his claim, he said, former Prime Minister PV Narsimha Rao introduced economic reforms and took the economy from 3 per cent to 9 per cent, while Rajiv Gandhi’s tenure saw a phenomenal 14 per cent industrial growth. However, both lost the polls. “Our (BJP) spokespersons keep talking about development, but they should learn from (Atal Bihari) Vajpayee because even he talked about India Shining (BJP’s campaign slogan in 2004 Lok Sabha polls) and left other things. We lost badly and (the BJP tally) were reduced to half,” Swamy said, adding “in politics, economic development is a must, but that is not sufficient”.Advocating a three-pronged approach to win polls, Swamy said, economic development is a must, but it should be blended with “Hindutva and a promising fight against corruption.” “The politics that has been going on before 2014 was (about) how to divide the votes on caste, region, religion and language, by consolidating the minority and dividing the majority. “If one has to combat that, then majority vote has to be consolidated. Hindus are 80 per cent, but BJP got 31 per cent votes (in 2014). Consolidating Hindu vote is compulsory,” he said.Swamy said there was no need for the Lok Sabha to pass Taxation Laws (Second Amendment) Bill, 2016, which gives people with unaccounted cash another chance to come clean.Instead, he said, Income Tax should have been abolished. The BJP leader also agreed with MIM MP Asaduddin Owaisi, who was a participant in the panel discussion, that the informal sector will collapse because of demonetization and the country would have to face dire consequences because of that.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Demonetization has “changed the rules of the game” for all parties as black money will now be out of elections, BJP President Amit Shah on Tuesday said and asserted that the upcoming UP Assembly polls will be contested on performance and not on politics of caste and nepotism.Shah also hit out at former Prime Minister Manmohan Singh, who has criticised demonetization, saying that despite being an economist, he had brought the growth rate down “from 8 per cent to 4 per cent” while a “chaiwallah” PM has again raised it to 7.6 per cent.Speaking at a programme ‘Agenda Aaj Tak’, the BJP chief said that people were supporting the Centre’s demonetization move and it has also “changed the rules of the game by dealing a blow to blackmoney” which was used in elections.”If it causes problems, it will cause problems for all political parties. It will be a level playing field. We want that black money is removed from the system, it is they who don’t want it,” Shah said.Responding to a question about BSP chief Mayawati calling demonetization as financial emergency, Shah responded with a jibe saying it was definitely so for her party.”In the upcoming UP elections, the politics of caste, the politics of nepotism will be coming to an end and the politics of performance will take centre-stage,” he said.Hitting out at political rivals, Shah said that till November 8, they were asking “what are you doing on black money and now they are saying why are you taking action against black money”.He claimed that post demonetization black money will not survive, because if is left in homes it will become junk and if it comes to banks it will become part of the system and will be taxable.Asked about Singh’s criticism, Shah said that he is an economist who was at top financial positions for years from RBI to Finance Ministry to being Prime Minister.”Former Prime Minister Atal Bihari Vajpayee was not an economist but he had taken the economy to a growth rate of 8 per cent.”Then Singh became PM and left it at 4 per cent. Now a ‘chaiwallah’ PM has taken over and again raised it to 7.6 per cent,” Shah said.It is Manmohan Singh, who has to answer questions rather than asking them, the BJP chief said. When he left the post, crores of people did not even have bank accounts, he said.Shah said that after seeing Singh, he does not want to be an economist.
Chief Minister J Jayalalithaa, one of India’s most charismatic political leaders, died in Chennai’s Apollo Hospital on Monday night after a bitter 74-day battle for life, ending an era in Tamil Nadu politics and plunging the state in immense grief. She was 68. Jayalalithaa, a spinster, breathed her last at Apollo just before midnight, over 24 hours after she suffered a cardiac arrest that derailed the halting progress she had been making on the health front.
“It is with indescribable grief, we announce the sad demise of our esteemed Honourable Chief Minister of Tamil Nadu, Puratchi Thalaivi Amma at 11.30 p.m.,” the hospital said in a statement. As Jayalalithaa’s death became known, a loud wail rent the air outside the Apollo hospital where thousands had gathered since her cardiac arrest on Sunday evening, hoping against hope that she would survive.
Here are the key developments which took place over the past few days in the run up to the fateful night of 5 December:
-Just days ago, Jayalalithaa, who was treated at Apollo hospital for acute lung infection, was moved from the critical care unit of the hospital to a private room fitted with state-of-the-art equipment. All clinical attempts were made to save the CM’s life but she passed away at 11.30 pm, the Apollo Hospital press release said.
-Her body will be kept at the Rajaji Hall for people to pay their respects, said AIADMK, which the actor-turned-politician headed for nearly three decades after the death of her mentor and Chief Minister MG Ramachandran or MGR.
-A seven-day mourning has been declared in Tamil Nadu. Schools and colleges will be closed for three days. Her funeral is likely to be on Wednesday, next to her mentor MGR’s memorial on Marina Beach.
-After the cardiac arrest, Jayalalithaa had been put on an extracorporeal membrane oxygenation (ECMO) device, a life support system.
-Two hours after the announcement of her death, in a swift political transition, her loyalist O Panneerselvam was sworn in as Chief Minister at a sombre ceremony at the Raj Bhawan along with all the ministers in the erstwhile Jayalalithaa Cabinet. Shortly after 1 am on Tuesday, Panneerselvam took the oath of office and secrecy. Thirty-one ministers were also sworn-in with him.
-On Monday morning, all 135 MLAs of the AIADMK were called to the party headquarters where they signed a deal to back Finance minister O Paneerselvam as the next CM. OPS is expected to take oath as the State’s next CM soon. Governor Vidya Sagar Rao had recently allocated all her portfolios to O Panneerselvam when Jayalalithaa was hospitalised.
-Panneerselvam had stepped into her shoes twice earlier when she was convicted in corruption cases. As Finance Minister, he was given charge of the portfolios held by Jayalalithaa after her admission to Apollo Hospitals on 22 September. A veteran actor, the self-made Jayalalithaa, who was five times Chief Minister of Tamil Nadu, was admitted to the Apollo hospital on September 22 with fever and dehydration, just four months after she led the AIADMK to triumphantly retain power in assembly elections.
-Leaders like Prime Minister Narendra Modi, President Pranab Mukherjee, Congress chief Sonia Gandhi, Home Minister Rajnath Singh and actors from Rajinikanth to Amitabh Bachchan tweeted out paying their last respect to Amma. Defining her as a mass leader, Modi said: “Jayalalithaaji’s connect with citizens, concern for welfare of the poor, the women and marginalised will always be a source of inspiration.” Congress President Sonia Gandhi, who too had counted the AIADMK leader as an ally for years, said Jayalalithaa lived the entire life with the same “indomitable courage with which she battled her last illness”.
-A minor scuffle outisde Jayalalithaa’s Poes Garden residence was reported. Some supporters of Jayalalithaa stormed the barricades outside her residence, prompting the police to push them back using lathis. However, the situation was quickly brought under control. Reports further said that police had locked down Chennai and the city has extremely tight security.
With inputs from agencies
First Published On : Dec 6, 2016 05:17 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>A senior law officer in Union Finance Ministry has lodged a complaint stating that three co-passengers allegedly misbehaved with her when she objected to their consumption of alcohol inside a train, the GRP said on Monday.The alleged incident occurred last night in the Mumbai-bound Amravati Express, as per the copy of the complaint made available on Monday. According to the complainant, the personal assistant of a state minister asked her not to file a complaint against the trio saying they are “our men.”The complainant stated that she noticed the three men drinking alcohol inside the coach and creating nuisance. She alleged that when she tried to stop them, they started abusing her. She said one of the men threatened her saying he is a relative of a minister in the state government. The trio were identified as Arvind Lawande, Yogesh Sriram and Pramod Gaikwad.The woman alleged that she received no help from RPF helpline, following which she pulled chain of the train, after which though the RPF personnel visited her coach, they did not take any action against the men.A non-cognisable offence has been registered against Lawande, Sriram and Gaikwad at Dadar GRP (Government Railway Police) here under sections 504 (intentional insult with intent to provoke breach of the peace) and 506 (criminal intimidation) of IPC. However, the designation of the woman officer and exact bogie where the incident occurred is not mentioned in the complaint copy.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Apollo refutes Jayalalithaa’s death rumours, AIADMK hoists flagTamil Nadu Chief Minister J Jayalalithaa remains in a “grave situation” despite the best efforts of doctors, Apollo Hospitals said on Monday. “Despite our best efforts, our beloved CM remains in a grave situation,” Apollo Hospital’s Joint Managing Director Sangita Reddy said in a Twitter post. Follow live updates on her health here.Demonetization effect: Service sector takes hit, PMI slumps to 3 year low in NovHit hard by demonetization, the services sector slipped into contraction in November — worst slump in nearly three years — as new orders dried up and customers cut spending due to cash shortages, putting pressure on RBI to keep rates low, a monthly survey showed on Monday. Read more here.INS Betwa slips while undocking at Naval Dockyard, 2 sailors missingINS Betwa, which is undergoing a refit at the Naval Dockyard in Mumbai, slipped on the dock blocks while undocking on Monday afternoon leading to damage to the naval warship. 14 personnel suffered minor injuries & 2 sailors are missing. Read more here.All payments over Rs 5,000 to be done electronically: FinMin tells departmentsThe Finance Ministry said on Monday that any payments by government departments to suppliers, contractors, grantees and loanees will now have to be made by electronically, in yet another push towards cashless transactions in the country. Read more here.You won’t believe how much Shah Rukh Khan and Salman Khan charged to host Star Screen Awards 2016!In the middle of all the exhilarating banter that the two of them exchanged on stage, one question kept ringing in the minds of the fans and that was, how much did SRK and Salman charge to host the segment? Click here to know more.
Could one game-changer move end up seriously impairing another game-changer? Will the Narendra Modi government’s bold demonetisation move affect the way the goods and services tax (GST) regime plays out?
Outside of the last meeting of the GST Council on December 1 and 2, state finance ministers were reported to have discussed the effect of demonetisation on their finances with finance minister Arun Jaitley. (The issue could not be discussed at the Council meeting itself because the issue does not fall into its jurisdiction.)
The states could well be raising the issue for purely political reasons or to bargain for higher compensation (which can be addressed if the Centre so wishes), but there are concerns about the economic impact of GST implementation so soon after demonetisation.
“GST is best brought in when the economy is thriving; you don’t create a compression and then implement it,” says R Kavita Rao of the National Institute of Public Finance and Policy (NIPFP), who has been closely involved in the whole process of framing the GST regime.
There are various estimates about the extent of the impact of demonetisation on demand and growth, as also about how long these effects will last, but there is general consensus that there will be an immediate adverse effect. Rao points out that small businesses especially will be most affected by the move and they are also the ones who will have to make more adjustments for the GST regime.
“By itself GST would be a disruptive development; now the disruption will be larger. Smooth adjustment will not be possible,” Rao argues. Large firms will also be affected by a drop in demand but they are, she says, more or less GST-ready; the small firms are not.
But can the government wait for the economy to settle down before moving into the final stage of GST? That seems unlikely. For one, the Modi government’s prestige is at stake – this is one of the big bang reforms it can claim credit for. Besides, the initial one or two years of GST will be a bit painful but things will look up after and Modi may want the high to come closer to the 2019 election. More importantly, there is also a constitutional timer ticking – Jaitley has pointed out that GST cannot be delayed beyond September 2017. The constitutional amendment ushering in GST says the prevailing indirect tax regime can continue for just a year after the Act was notified. Since it was notified in September, the current tax regime will have to end in September 2017.
Rao agrees this does complicate matters, but suggests a way out could be found. “If you do it now, GST will be a killer,” she warns.
Even without demonetisation, implementing GST from April 1 would have been a bit of a stretch, she believes. The supporting legislations have not been passed and businesses will need to understand the implications and prepare for the new regime. As things stand, even the GST Council has not cleared the draft of these legislations.
The last meeting of the Council got deadlocked over the sharing of administrative powers. In September, there was consensus at a Council meeting on states having jurisdiction over transactions below Rs 1.5 crore, the centre and the states having dual control over transactions above that threshold and the centre having exclusive jurisdiction over service tax. This writer had pointed out then that working out the mechanics of this may not be easy.
Some states have raised objections to the exclusive jurisdiction of the Centre over service tax. Rao feels this is a point that needs to be addressed. For states, especially small ones, some services may yield large revenues. For the Centre, however, collections from these may not amount to very much and these may slip under the GST radar.
Another problematic issue is that of dual control in the case of the integrated GST (IGST, which is levied on inter-state movement of goods). All these concerns are genuine ones for which solutions need to be found, Rao says. “The aim should be to ensure that, as far as possible, the tax payer has to deal with only one administration.”
Jaitley has said he has his fingers crossed about progress being made in the next meeting of the GST Council on December 11 and 12. Everyone will be on edge till then.
First Published On : Dec 5, 2016 16:38 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Congress Party on Monday questioned Prime Minister Narendra Modi’s mindset post the government’s decision that married women are entitled to more gold than unmarried women and said that he should rather focus on visiting the Parliament debating issues of national interest.Congress leader Renuka Chowdhury in a sarcastic tone said the Prime Minister will now decide how much jewellery a married woman can have and how much jewellery a non-married woman can have. “Who is he to decide? Now, he is saying men should keep this much jewellery. Then how much will you give to transgenders? How can you discriminate between two women that you will get this much jewellery? Then please ask the husband to buy the jewellery. He thinks women’s right increases once they are married and men cannot wear jewelleries,” Chowdhury told ANI.”In which era is he stuck? He would have understood the responsibility of a society and family had he kept his wife with himself. He does not know about that. He is too busy to come to Parliament. He is busy deciding how much gold married woman or unmarried woman is allowed to have,” she added.The government has, however, issued a clarification on whether new tax proposals for undeclared wealth will apply to gold and other jewellery.The Finance Ministry in a statement said jewellery that is inherited or that bought with declared wealth will not be taxed. “Legitimate holding of jewellery up to any extent is fully protected,” it clarified. “There is no limit on holding of gold jewellery or ornaments by anybody provided it is acquired from explained sources of income, including inheritance,” the statement added.The rules follow the November 8 decision to demonetize high-value currency notes to check tax evasion.
<!– /11440465/Dna_Article_Middle_300x250_BTF –> Delhi Chief Minister Arvind Kejriwal said that if demonetization would “eliminate” corruption and black money, he would chant “Modi, Modi” while reiterating his demand that the Prime Minister withdraw it or else the country’s “economy will be destroyed”.Kejriwal said the Prime Minister changes his clothes several times in a day but he preaches to people to sacrifice some time due to demonetization.”Due to demonetization, labourers, farmers and traders have been ruined and people are losing their jobs, but PM is busy with changing dresses several times. Modi ji whatever you say, you should implement it first on you,” he said.Addressing a gathering of traders in Bawana, Kejriwal said he has differences with the Prime Minister on several fronts, but if he does good works like Swachh Bharat Abhiyan, Yoga Day, he will find us standing with him.”If demonetization would really eradicate corruption and black money, I will also chant ‘Modi, Modi’. We had put our lives at risk during anti-corruption movement with Anna ji.”We had welcomed the Prime Minister’s move for Swachh Bharat Abhiyan and Yoga Day, surgical strikes, but Modi has done wrong by introducing demonetization and we will oppose it,” Kejriwal said when some section of traders chanted “Modi Modi”.They (BJP) will ruin the country’s economy and there is no earliest solution being seen to the chaos created due to demonetization, he also said.Kejriwal alleged that PM has brought demonetization to “benefit” his corporate friends who had taken huge loans.Later in a video posted on a social networking website the Delhi Chief Minister reiterated his demand that PM withdraw demonetization.”PM has sought 50 days from the people to remove their problems arising out of the demonetization, but the Finance Minister said that it needs six month to make all things in place. Even Modi ji and Jaitley don’t know solution.. ,” he said.Taking a dig at PM for his remark over a WhatsApp video showing beggar using a swipe machine, Kejriwal said that BJP should stop “accepting” money in cash.”80 per cent of donation of the BJP comes in cash. Prime Minister should first stop this. 92 per cent of Aam Aadmi Party comes from cheques and other methods…Modi has fixed a limit of Rs 2.5 lakh for wedding.”I want to know from Modi ji whether his ministers and party MPs get marriages of their daughters and sons at an expenditure of Rs 2.5 lakh. Several shops and industry have been closed,” he said.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Income Tax department has rejected an astonishing Rs 2 lakh crore disclosure by a Mumbai family as well as the controversial Rs 13,860 crore by an Ahmedabad businessman under the Income Disclosure Scheme that closed in September and a probe is on against them to determine the intention behind their false claims.Meanwhile, the government has revised upwards the total illicit wealth disclosed in the one-time window to Rs 67,382 crore as against Rs 65,250 crore estimated earlier. “Among the declarations received, there were two sets of declarations of high value which were not taken on record in the above figure because these declarations were found to be suspicious in nature being filed by persons of small means,” the Finance Ministry said in a statement on Sunday.A family of four declarants namely, Abdul Razzaque Mohammed Sayed (self), Mohammed Aarif Abdul Razzaque Sayed (son), Rukhsana Abdul Razzaque Sayed (wife) and Noorjahan Mohammed Sayed (sister), who were shown as residents of Flat no. 4, Ground Floor, Jubilee Court, 269-B, T.P.S-III, Linking Road, Bandra (W), Mumbai, filed a total declaration of Rs 2 lakh crore, it said. The other declaration was filed by one Mahesh Kumar Champaklal Shah resident of 206, MangalJyot Tower, Jodhpur Gram Satellite, Ahmedabad for Rs 13,860 crore. “Therefore, after due consideration, the Income Tax Department decided by 30th November, 2016, to reject these two sets of declarations of Rs 2 lakh crore and Rs 13,860 crore respectively. The Department has since commenced enquiries against these declarants to determine the intention behind these false declarations,” it added.On October 1, it was announced that declarations totalling Rs 65,250 crore were received from 64,275 declarants, subject to reconciliation. After final reconciliation the revised figure of actual declarations received and taken on record was Rs 67,382 crore which had been made by 71,726 declarants. The revised figure will fetch government a little over Rs 30,000 crore direct tax revenue. In case of the Mumbai family disclosure, the statement said, three out of the four PAN numbers were originally in Ajmer which were migrated to Mumbai in September 2016, where the declarations were filed. Shah meanwhile has threatened to disclose the names of politicians and businessmen for whom he says he was acting as a front.Former Finance Minister P Chidambaram in a tweet said: “There is a Rs 13,860 crore hole in the Rs 65,000 crore IDS! How many more holes.” The statement said these declarations from Mumbai and Ahmedabad were kept pending for investigation about the genuineness of the same and were not included in the total value of declarations announced on October 1. After due enquiry it was found that these declarants were persons of suspicious nature and very small means and the declarations could have been misused, it said. The Department has commenced enquiries against these declarants, it said. IDS was announced in the Budget under which declaration of undisclosed income or asset could be made by agreeing to pay 45% of the declared amount as tax, surcharge and penalty. The declaration widow of four-month ended on September 30. Now on the final declarations, the government will get Rs 30,321.9 crore in tax and penalty. Government had given the option of paying tax amount in two instalments up to September 30, 2017. Half or Rs 15,160.9 crore is to be accrued in the current fiscal. The first installment of 25% has already come as the last date for payment was November 30.Last year, under a similar scheme for foreign black money holders, 644 declarations of undisclosed foreign income and assets were received, and just Rs 2,428 crore was collected in taxes. A total tax of Rs 9,760 crore was collected under the Voluntary Income Disclosure Scheme (VIDS) amnesty scheme brought by Chidambaram in 1997. While IDS is not an amnesty scheme, VDIS provided blanket amnesty, he said. Taxation under IDS is charged at the rate of 45% while the effective rate of tax in the 1997 scheme was in single digit.
New Delhi: The Income Tax department has found “various inconsistencies” in cash deposits in Jan Dhan accounts and detected about Rs 1.64 crore deposited by persons who have never filed returns as their income shown is below the taxable limit.
“Investigation being conducted by the Income Tax Department across India into the sudden surge in cash deposits in Jan dhan accounts have revealed various inconsistencies,” a Finance Ministry statement said.
Undisclosed money worth about Rs 1.64 crore has already been found in Jan Dhan accounts, it said.
The money has been deposited by persons who have never filed returns, with their income being below the taxable limits, it added.
The money has been detected at Kolkata, Midnapore, Ara (Bihar), Kochi and Varanasi, the statement said, adding that Rs 40 Lakh has been seized from one such account in Bihar.
Undisclosed income so detected will be brought to tax as per the provisions of the Income Tax Act, 1961, apart from other actions depending upon the outcome of investigations, it said.
“The Central Board of Direct Taxes (CBDT), once again urges the account holders not to consent to any kind of misuse of their accounts which would expose them to the dangers of being held responsible for the tax evasion by unscrupulous elements,” said the statement.
After Prime Minister Narendra Modi surprised entire nation with demonetisation of 500 and 1,000 rupee notes on November 8, deposits in Jan Dhan accounts have increased to 28,685 crore. As of November 9, the balance in about 25.5 crore such accounts was Rs 45,636.61 crore.
The total deposit in 25.85 crore such accounts was Rs 74,321.55 crore at the end of November 30, as per Finance Ministry data. The total was Rs 72,834.72 crore in 25.68 crore accounts at the end of November 23.
The Pradhan Mantri Jan Dhan Yojna was launched in August 2014 to increase banking penetration and promote financial inclusion in the country.
First Published On : Dec 4, 2016 19:14 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>In a dramatic turn of events, Gujarat real estate businessman Mahesh Shah who went missing after declaring Rs. 13,860 crore under the Centre’s Income Disclosure Scheme (IDS), was detained on Saturday by the Income Tax department.The arrest took place barely minutes after he “mysteriously” appeared and interacted with a media channel. The 67-year-old Ahmedabad businessman, as per the scheme, was supposed to pay 45% tax, which comes to Rs. 6,237 crore, before he disappeared from the IT department’s radar.Before the arrest, the department also conducted various raids at his residence, but did not yield any significant leads. In October, Union Finance Minister Arun Jaitley had announced a total of 64,275 disclosures were made under the scheme which collectively amounts to Rs. 65,250 crore.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Blaming Pakistan for having an uneasy relationship with India, Finance Minister Arun Jaitley on Friday said it is for Islamabad to introspect as to why there are tensions between the two neighbours.”It is a serious situation. Right from the day this government had been formed and even prior to that, India has taken one step after another honestly trying to improve relations with Pakistan,” he said at HT Leadership Summit here.”Prime Minister Narendra Modi took a lot of initiatives including unconventional ones but then the response was Pathankot or Uri attack, prompted by Pakistan. This cannot be normal as far as Indo-Pak relationships are concerned. If there are tensions, its for the Pakistan to introspect really why there are tensions,” he said.Asked about impact of change in regime in the US, Jaitley said the relationship between the two country is expected to strengthen further. “I have not the least doubt that India’s relations with the United States would continue to be on the same plank as it was, probably growing and maturing almost by the day,” he said. Further adding “This was unusual election as far as the US was concerned.When one world’s most powerful democracies through a fair electoral process takes a decision, we have to accept the decision.”
New Delhi: Blaming Pakistan for having an uneasy relationship with India, Finance Minister Arun Jaitley on Friday said it is for Islamabad to introspect as to why there are tensions between the two neighbours.
“It is a serious situation. Right from the day this government had been formed and even prior to that, India has taken one step after another honestly trying to improve relations with Pakistan,” he said at HT Leadership Summit in New Delhi.
Prime Minister Narendra Modi took a lot of initiatives, including unconventional ones but then the response was Pathankot or Uri attack, prompted by Pakistan, he said.
“This cannot be normal as far as Indo-Pak relationships are concerned. If there are tensions, it’s for the Pakistan to introspect really why there are tensions,” he said.
Asked about the impact of the change in regime in the US, Jaitley said the relationship between the two countries is expected to strengthen further.
“I have not the least doubt that India’s relations with the United States would continue to be on the same plank as it was, probably growing and maturing almost by the day,” he said.
“This was an unusual election as far as the US was concerned. When one of the world’s most powerful democracies through a fair electoral process takes a decision, we have to accept the decision,” he added.
First Published On : Dec 2, 2016 16:13 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Hitting out at Congress, Union minister M Venkaiah Naidu on Thursday said that the opposition party was not allowing Parliament to function even after the Prime Minister attended the House and accused it of “shying” away from debate as it has run out of facts and issues.The Information and Broadcasting Minister said Prime Minister Narendra Modi was present in the House for the third day as he wanted to participate in the debate but the Opposition, particularly Congress, behaved “irresponsibly” by rushing to the Well of the House. He accused the Congress of trying to mislead the people but all these things are “boomeranging” on it.Although the Houses of Parliament witnessing hardly any work since the Winter Session began mid-November, Naidu expressed confidence that all pending bills will get passed during this session. “The Opposition, particularly Congress totally stands exposed. They were saying that PM is not coming to the House and not participating in debate and accused him of giving lectures outside Parliament. This is the third day that PM came to Parliament. He wanted to participate in the debate. We (govt) have also made our intention clear, the PM will not only be present, he will intervene as and when required. At the end, the Finance Minister will reply to the debate,” Naidu said.He said the Congress was alone in the House on Thursday as other parties did not join them in the Well of the House. “The cat is out of the bag, they have run out of arguments. They are shying away from the debate as they have no issue. They have been exposed. They started creating hungama. At the end of the day, in the presence of the PM, the House was adjourned. So it clearly proves they have been trying to change the goal post from time to time. By bringing out some reasons or the other, they do not want debate to happen or House to function. They do not have any facts,” he said.The Rajya Sabha was adjourned for the day after Opposition uproar, demanding apology by the PM for certain remarks made against them over demonetization while the Lok Sabha was adjourned for the day due to unabated opposition protests over the same issue.
Banks without money are redundant. In Delhi these past 48 hours have been a telling experience. We are an incredible people that despite the fiscal architecture being compelled to collapse like a condemned building, life goes on with very little change. The cab driver is stoic. The traffic is no less than it was in October, somehow, the social fabric is holding on.
A fellow passenger coming in from the US is carrying a few thousand one dollar bills. Says, it helps him avoid hassles and queues and everyone takes dollars as tips and payments and he will pay his hotel bill by card and he doesn’t need a single rupee in the capital of the country.
I tell him it is illegal to give people foreign exchange. He laughs at me. He has brought in below the legal limit and he will take back the rest. And no one rejects his bills.
Imagine if you will, thousands of NRIs swarming in to India with one dollar bills…we could be like Zimbabwe, kill the local currency and use dollars. I jest but the kernel of possibility is a thought.
I go to the bank and I am told the money for the day has not arrived. It finally does and is greeted with cheers like one of those UN Relief convoys. This is a decent branch where they are not rude — they just cannot give you Rs 24000 because they divvy up the Rs 10 lakhs allotted to them for the day into maximums of Rs 10,000. This is a fortunate bank. Many others have got zilch.
Ironically, the right hand man of a BJP politician tries to cash his cheque and then moans about the limit and the bank manager tells him it is his Sarkar and there is nothing she can do. Good for her.
The crisis thickens as people complain they cannot pay their staff and that new cheque books will take ten days to get delivered.
One man has lost his father and has to feed the ‘baradri’ for three days. He is seeking loans from neighbours. History is kicking in. The collective spirit of helping each other and giving and taking to put it simply is what is keeping this nation’s morale at least at half-mast. Everyone is giving him a little…that is our magic potion Getafix.
Yes, indeed, the patience is impressive. There is still this over-riding belief that something magical will happen and this sacrifice will not be in vain.There has to be a pot of gold at the end of the rainbow or moral rectitude. The rich have been unseated and poor will inherit the earth. This sentiment permeates the average man who firmly believes that the comeuppance of the wealthy is a wonderful thing.
Then why are the wealthy not unhappy. I know of people whose lifestyle stank of ill-gotten gains. Over seventy years of half open desk drawers and shady premium payoffs surely there have been several thousand colossal ‘victims’ of this cleaning up. None of them seem perturbed. Hasn’t anyone lost a fortune, aren’t there folks out there who had cupboards full of now pointless high denomination notes who should be in agony and writhing on the floor. Nto one of the few you would suspect had illegal hoards is batting an eyelid.
Either they are damn fine actors or they know something I don’t.
First Published On : Dec 1, 2016 13:33 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Finance ministry and the Reserve Bank of India (RBI) are keeping a close watch as the payday approaches. Viewing the first week of the month as salary time, the central bank has released less cash in the past two days to ensure larger availability from December 1, sources said.Companies are looking for creative ways to help employees not stand in queues for getting their monthly salaries. The demand for cash cards has gone up by hundreds of thousands.Banks have a tough task at hand as pensioners and the salaried class queue up for monthly salaries. With state treasuries restricted from accepting or giving cash, state government employees and pensioners may find it difficult to get their monthly dues, not to mention the thousands of other employees in the organised and unorganised sectors.”While the RBI reserves may be depleting, it is also being replenished to ensure sufficient cash,” ministry officials said, adding that there was enough cash till December 31. The government was of the view that the ATM withdrawal quantum could be raised at a later stage when more Rs 500 notes will be made available.State governments, which were earlier worried about making payments to employees and pensioners through treasuries are now heaving a sigh of relief, with the RBI promising them adequate supply. Kerala Finance Minister Thomas Issac on Wednesday said that the state will face no difficulties on payday as the RBI has agreed to release Rs 1,000 crore to the state.Arundhati Bhattacharya, chairman of State Bank of India (SBI), told DNA: “We have also tried to use analytics to forecast cash requirements during salary period so as to ensure better preparedness. We hope to be able to undertake salary payments smoothly. Till date, we have tried our best to ensure that we are able to serve the maximum number of people – both at the branches and ATMs.”Bhattacharya added: “We would like to appeal to people to use debit cards for purchases rather than for drawing cash.”The RBI on Wednesday took steps to increase the liquidity situation to ensure adequate cash supply for stabilising the cash crunch scenario, triggered by demonetization.December 1 is also the payday for private and government sector, and most employees are now demanding salary in cash rather than online or cheque payment.Taking this into consideration, the Finance ministry has asked the RBI to step up liquidity to increase printing of currencies and circulation of the same.The bank explained that it is trying its best to increase cash circulation of Rs 100, Rs 500 and Rs 1,000 notes for all markets, apart from printing more currency notes. In the next one week, the RBI is expected to increase the cash circulation of the aforementioned denominations.Rituparna Chakraborty, President, Indian Staffing Federation (ISF), said that it will all also propel some desirable changes such as bringing the informal workers into the fold of formal workforce. Today, 94% of India’s workforce is in the informal sector, whose incomes do not even get properly accounted.”In the medium to long term, she feels employers engaging casual workers will be compelled to make payments to them only through banking or other formal modes. You will not see any impact of it (cash shortage due to demonetization) on large organisations and bigger metros. It would be only in sectors like real estate, construction and infrastructure, where a lot of work used to get done through cash,” Chakraborty added.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Tripura Chief Minister Manik Sarkar has refused an offer to be a member of a committee on digitisation and cashless transactions as proposed by Prime Minister Narendra Modi, in view of his opposition to the Centre’s demonetization move.”Union Finance Minister Arun Jaitely called me up yesterday and told me that the Prime Minister wanted me to be a member of a proposed committee on digitisation and cash less transaction. I told him modestly that the subject is highly technical and I have no experience with it,” Sarkar told reporters.But Jaitely insisted, according to Sarkar, that the committee would have chief ministers of other states, many of whom might have no experience of it either and that technical experts would be there to help.Sarkar, however, refused the offer and argued: “My being in that committee would create a lot of confusion since people in our country were facing unprecedented inconveniences due to demonetisation. I opposed the decision because it created a disorder in our economy and also 75 to 77 people have committed suicide.”
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Congress on Tuesday dubbed as yet another ‘jumla’ (gimmick) Prime Minister Narendra Modi’s call to party legislators to submit bank account details after demonetization and dared him to make public all financial and land dealings of BJP and RSS in the last six months.Congress chief spokesperson Randeep Surjewala said Modi’s move is also an attempt by him to deflect public attention from the alleged leakage of demonetization decision, which he termed as the “biggest scam” in the country so far.Surjewala along with party leader Sushmita Dev, accused BJP of buying properties in 18 districts of Odisha on the lines of those purchased from in Bihar.”The manner in which revelations are coming out whereby BJP and its leaders are buying land in Odisha and Bihar, Modiji fears that all this will come out.”All these things point out that there is need to hold a detailed probe into the alleged scam. There is need to hold a detail and thorough JPC probe into the matter,” he said.”Prime Minister Narendra Modi should stop doing theatrics and should stop hiding behind rhetoric. He should stop hiding behind ‘jumlas’. Modiji your real face stands exposed and time has come that you remove the ‘mask of jumlas’ and follow ‘Raj Dharma’.”If you have nothing to hide, you should make public accounts of BJP and RSS and affiliate organisations six months prior to demonetization,” he told reporters at AICC briefing.The Congress media in-charge alleged that this is being done by Modi to divert the attention of public so that they do not ask details of accounts of his partymen before demonetization.Dev said, “Modi government has time and again deflected the attention of public from real issues. It is nothing but a sham and a hoax.”Attacking Modi for bringing yet another scheme to “help black money hoarders legally convert their money”, he said, “The truth is that Narendra Modi is trying to give protection to black money holders and is devising new ways and means in doing so.””He is the new 50:50 PM who shares and grants concessions to black money holders,” he alleged.Surjewala said, “the truth will come out as how much money was actually being changed from black to white, who had prior information of the demonetization decision?”.The Congress leader said Modi first brought out a fair and lovely scheme from June 1 to September 30, 2016 and then announced the ‘Tughlaqi decision of demonetization’.”When that did not work, now another new scheme under the name of ‘black money holder welfare scheme’ has been brought now. This is Modiji’s and his government’s pledge in fighting black money.”To avoid any questions being raised, he brought this new bill in the form of a Money Bill which was passed amid din in Lok Sabha without holding a discussion,” he said.Surjewala said by bringing the money bill in Lok Sabha and getting it passed today, amounted to “trampling of democracy” and was a “complete affront” on authority of country’s Parliament and Constitution. Surjewala said the narrative of BJP Government in reality is that the “tax penalty of 132 per cent has been brought down to 50 per cent” and BJP is hiding behind the “smokescreen” that it will provide this black money belonging to the rich for the welfare of the poor.”Modiji said he will impose penal tax and 200 per cent penalty along with prosecution of those depositing black money. Now, there is change of heart by imposing 49.9 per cent tax only,” he said.He also questioned the legal sanctity of the Chief Minister’s committee constituted by government to look into issue of demonetization.”Constitution of a committee of Chief Ministers 20 days after the decision of demonetization is putting wool over eyes of people of this country. I will decide first and I will think later and will listen to no one. And if anybody questions me, I will brand him or her as anti-national. This is the usual style of Narendra Modi.”May I ask Narendra Modi today, is a Chief Minister’s committee higher than the combined cumulative wisdom of India’s parliament. Is Prime Minister now accountable to Parliament of India, elected by people of India, or will he be accountable to people in rock concerts or a selective band of a Chief Ministers committee,” he asked.Surjewala wondered what the legal or constitutional authority of such a Chief Ministers committee to dictate to government to either reverse or course corrected its unwitting decision of demonetization.”Modiji stop hiding behind smokescreen and start addressing the problems,” he said.Dev said, “I believe it flies in the face of the Prime Minister s statements that the Finance Ministry in future is going to take many more steps to look at the huge surge in the Bank Accounts of the Jan Dhan accounts.”If the Finance Ministry is any way going to look in to why this surge has happened, the question is why does the President of BJP need to look into the Bank Accounts of the his MPs and MLAs,” she said.”Prime Minister Modi has today had a sell out and he has actually led the corrupt and black money hoarders walk away.Why there is need for this deflection the reason is very clear that he is not willing to disclose what is in the Bank Accounts and what the transactions of the RSS and BJP are,” she said.”There is need to hold a detailed and thorough JPC probe into the matter. If they have not done any wrong, they should tell the country as to how much property they have purchased and what is the source of their money.
<!– /11440465/Dna_Article_Middle_300x250_BTF –> BJP alleged that Congress leader P Chidambaram as Finance Minister presided over some of the biggest scams in the country as it mocked his claim that he would have resigned from his post had his Prime Minister insisted on demonetization . “It is absurd that he is making such remarks. He did not constitute a SIT on black money despite the Supreme Court’s order. Some of the biggest scams like 2G and coal gate happened under his watch. “He supported the zero loss theory in the coal scam. He lacks any moral right to make such assertion,” its National Secretary Shrikant Sharma said. In many ways, Chidambaram did not act as the Finance Minister but “scam minister” during the UPA, he alleged. It would be good if he supported the Modi government on its action against black money and corruption, he said. Senior Congress leader P Chidambaram had yesterday said that had he been the Finance Minister, he would have resigned from the post if the Prime Minister insisted on demonetization . The BJP leader also took a dig at Delhi Chief Minister Arvind Kejriwal, saying that he undertook a U-turn after rising to power as the face of an anti-corruption movement. The person under whom he started the anti-corruption agitation is supporting Prime Minister Narendra Modi on demonetization while he is opposing it, Sharma said. “Now Kejriwal protects bureaucrats accused of corruption and his minister accused of having fake degrees,” he said.
New Delhi: Finance Minister Arun Jaitley on Monday introduced a bill in the Lok Sabha to amend the Income Tax rules, levying a tax of 60 percent on undisclosed income or investment or cash credit deposited in the banks.
According to the Taxation Laws (Second Amendment) Bill, 2016, the declarant will have to pay a tax of 60 per cent and an additional surcharge of 25 per cent of the tax (i.e. 15 per cent of such income), resulting in a total tax amounting to approximately 75 percent.
The amending legislation also gives discretionary power to the assessing officer to increase the penalty by 10 per cent of the total tax, thus raising the outgo to 82.5 per cent (75 per cent plus 10 per cent of that amount) of the unexplained or concealed income. No deductions or set-off is allowed on this amount.
The government has also come up with an income disclosure scheme called the Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016 which allows people to deposit money in their accounts till April 1, 2017, by paying 50 per cent of the total amount — 30 per cent as tax, 10 per cent as penalty and 33 per cent of the taxed amount, that is 10 percent, as Garib Kalyan Cess.
The duration of the scheme will be announced later. The declarant will get immunity from prosecution under any law.
However, those who are prosecuted under the Naroctics Act, the Prevention of Money Laundering Act, or for holding ‘benami’ (by proxy) properties and smuggling offences are not eligible to declare their hidden income under the scheme.
Additionally, under this scheme, 25 percent of the amount has to be locked up for four years in interest-free scheme.
“This amount is proposed to be utilised for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood,” the Finance Ministry said in a statement.
The total amount so declared under this new income (PMGKY) will not be included in the total income of the declarant for any assessment year. No set-off is allowed under any head on this amount.
Labelling it as another chance for people having unaccounted income, brokerage firm TradingBells co-founder and CEO Amit Gupta told IANS: “It is like the earlier Income Declaration Scheme, but with a much higher penalty. It is a good move as black money will come into the system through this disclosure scheme.
“The clause of 25 percent lock-in period for four years will give a boost to the financial sector. A lot of unaccounted money will come through this. With 50 per cent tax, and 25 per cent locked in, it leaves only 25 at their disposal.”
“There are reports of people converting their black money into black again in the markets at a rate of 30-40 percent commission. A too higher rate would have defeated the purpose. Though the debate is still on if the source of the income needs to be revealed,” Gupta added.
In case of undeclared income found during Income Tax searches, a penalty of 30 percent shall be imposed by the Income Tax Department apart from the regular tax on the money, taking the total to 63 per cent. This would be done if the assessee admits to the undisclosed income and “substantiates” the manner in which the undisclosed income was derived.
However, if the assessee does not do that, the penalty would be raised to 60 per cent, in addition to the tax required to be paid or a total of 93 per cent.
In the objects and reasons statement, the Finance Minister said the amendment has been brought forward as “there have been representations and suggestions from experts that instead of allowing people to find illegal ways of converting their black money into black again, the government should give them an opportunity to pay taxes with heavy penalty and allow them to come clean.”
Jaitley said this would allow the government to get additional revenue for undertaking activities for the welfare of the poor, but also the remaining part of the declared income would legitimately come into the formal economy.
In the wake of demonetisation, there have been reports of people increasingly finding illegal ways of converting their black money into black again, so the amendments are on the expected lines, said global consultancy firm Protiviti India MD Nidhi Goyal.
“We were expecting such changes. The government was trying to insert a law to tackle the black money in the system post-demonetisation,” Goyal told IANS.
First Published On : Nov 28, 2016 21:54 IST
<!– /11440465/Dna_Article_Middle_300x250_BTF –>For the 8th straight day, Opposition stalled Parliament over demonetization , even as the government sought to break the logjam by promising that Prime Minister Narendra Modi will speak on the issue if a debate takes place.Functioning of both the Rajya Sabha and the Lok Sabha was disrupted, leading to their premature adjournment for the day. Rajya Sabha saw three adjournments between 11 am and 2 pm, before the final adjournment for the day. Lok Sabha was adjourned twice before being adjourned till tomorrow at 2.10 pm. In the Lok Sabha, a number of Opposition leaders, including Mallikarjun Kharge (Cong), Sudip Bandhopadhyay (TMC) and Mulayam Singh Yadav (SP), pressed for acceptance of their demand for an Adjournment Motion and debate under a rule that entails voting. They also demanded presence of the Prime Minister during the debate.In response, Home Minister Rajnath Singh said the Prime Minister will speak on demonetization if the Opposition wanted but the debate should take place, for which the rule will be decided by the Speaker.Singh said it was clear that nobody was questioning the government’s intentions over demonetization or imputing any malafide. Even as he was speaking, opposition members trooped into the Well and shouted slogans.Amid the din, Singh said the government is ready for a discussion and willing to listen to the complaints and suggestions different parties have over the execution of the demonetization move. “As far as the Prime Minister coming to the House is concerned, if the Opposition wants he will come and intervene,” Singh said, assuring the Opposition. The decision regarding the rule under which the debate should take place is for the Speaker to make, he said.He termed demonetization as a “historic, bold and pro- poor” decision taken to target black money and in national interest.However, as the uproar continued, Speaker adjourned the House till 2 pm.Earlier, Kharge said demonetization had harmed the economic system, the farmers, youths, labourers and women among others who are in distress.The Congress leader said over 70 people have died due to the faulty implementation of demonetization decision.He cited the incident of a Union Minister facing difficulty in paying hospital bills after his brother died and said it was an evidence of the extent of the crisis. He was referring to Sadanand Gowda who faced the problem.”There is only one way to break this deadlock. The Prime Minister should come to the House and the opposition’s adjournment motion should be accepted,” he said. Bandhopadhyay of Trinamool said the government must takeinitiative to break the impasse as people will ask what does Parliament stand for, if it is adjourned everyday.Supporting Kharge, Mulayam Singh said if Modi does not come to the House on such an important matter, then when he will come. Farmers are facing a lot of problems, he said.Jai Prakash Narayan Yadav (RJD) called the decision impractical and anti-people.An AIADMK member said the government should take initiative to ease people’s sufferings, while B Mahtab (BJD) said the onus was on the Centre to take steps to break the impasse.Anandrao Adsul of BJP ally Shiv Sena targeted opposition parties, saying neither ‘Bharat Bandh’ nor ‘Aakrosh Diwas’, which different parties had announced for today, was visible.He, however, lamented that the recent announcement of the Centre that NABARD would disburse Rs 21,000 crore to cooperative banks has not been implemented. The announcement had come after an unhappy Sena delegation had met the PM.”Situation remains bad in rural areas,” he said.When the Lok Sabha met again at 2 pm after adjournment, Finance Minister Arun Jaitley rose to introduce a bill to amend the Income Tax Act allow authorities impose 75 per cent tax and 10 per cent penalty in case they detect undisclosed wealth deposited post demonetisation.Members from the opposition parties, who were asking the Speaker to take up their adjournment motion on note ban, rushed to the Well raising slogans. Jaitley then introduced the bill amid din.The din and slogan shouting against the government continued for another few minutes and the House was adjourned for the day, 10 minutes past 2 pm.Earlier in the day, as soon after the House expressed its condolences over the death of Cuban revolutionary leader Fidel Castro, Opposition members, including those from the Congress and Trinamool, wanted to speak on demonetization issue.Speaker Sumitra Mahajan declined their request, saying the matter could be taken up after Question Hour.Opposition members then trooped into the Well holding placards and shouting slogans against the Prime Minister as well as the government, while members of AIADMK were seen standing near their seats.The Speaker asked them to desist from showing placards or papers in the House, reminding them that it was against the rules.Amid the din, the Question Hour went on for around 20 minutes and saw four questions as well as supplementaries being taken up.In the Rajya Sabha, soon after the House mourned the death of Cuban revolutionary leader Fidel Castro and the listed papers were laid, Naresh Agrawal (SP) said nationwide protest ‘Aakrosh Divas’ is being observed today against demonetization that has caused hardships to common man.Leaders of other opposition parties including Mayawati of BSP, Derek O’Brien of Trinamool Congress, Sitaram Yechury of CPI-M and Anand Sharma of Congress joined in.Leader of Opposition Ghulam Nabi Azad said the nation was seething in anger over the hardship and harassment caused because of the announcement made by the Prime Minister Narendra Modi on November 8.Soon Congress and TMC members trooped into the well of the House shouting slogans against the Prime Minister. Ruling benches also joined him by shouting slogans favouring start of a discussion on the issue.I&B Minister M Venkaiah Naidu rose to state that the discussion which had started on the opening day of the Winter Session of Parliament on November 16 and has not yet concluded, should be resumed, instead of such disruption of proceedings.Deputy Chairman P J Kurien agreed with the suggestion of Naidu but the din continued, forcing him to adjourn the proceedings for half an hour.When the House met again, the Opposition members were again on their feet shouting slogans against demonetisation.Kurien insisted that the discussion on the demonetization be resumed. He said the Prime Minister will come once the discussion starts.Yechury asked why the Prime Minister was not coming to the House.Kurien asked Yechury how he knew the Prime Minister would not come, while noting that it is already on the record that he will speak on the issue.As the Opposition members kept shouting slogans in the Well, the Chair adjourned the House till noon.When the House reassembled for Question Hour, Azad said he wanted to make it clear that 18 Opposition parties have decided to observe ‘Jan Aakrosh Divas’ today.He said there was no discussion among them about ‘Bharat Bandh’. “If anyone has raised the issue of Bharat Bandh, it is the Prime Minister,” the Leader of Opposition said, adding Modi is responsible for Bharat Bandh.The Congress leader said the opposition is observing the day as ‘Jan Aakrosh Diwas’ to highlight the ‘aakrosh’ (anger) across the country.”There is ‘aakrosh’ (anger) among the youth, the women and the old against this new policy of demonetisation,” Azad said, adding that so far 75 people have lost their lives due to the government’s decision to go for demonetisation.He said a 96-year old man had died while standing in a queue outside a bank in Chennai and a young girl had committed suicide as there was no money for her wedding.Earlier, when Ansari allowed Azad to speak, I&B Minister said he wanted to raise a point.Ansari, however, said the floor has already been given to Azad and if the government has a point it would be allowed later.The treasury benches then created din, prompting the Chairman to adjourn the proceedings till 1400 hours “because the House is not being allowed to run”.When the House met again at 2 PM, Commerce Minister Nirmala Sithraman, on behalf of Finance Minister Arun Jaitley, tabled a notification providing for exemption of central excise duty for the manufacture of POS devices (Point of Sale). Soon after this, SP leader Naresh Aggarwal raised a Point of Order. As he started, he made certain comments about the Treasury Benches which was objected to.The Deputy Chairman eventually expunged the remark after listening to both the sides. Afterwards, Congress leader Anand Sharma raised a Point of Order, questioning how the government could deprive the common man of his own money in the bank accounts by limiting withdrawals. He said the Constitution specifically says that a person cannot be deprived of his property by the government.Sharma said there is no law under which this has been done and therefore it is illegal.The Constitution does not allow even the Prime Minister or the government to deprive the citizens of their money and property, especially bank accounts, the Congress leader said, adding not one Bill was tabled in the House in this regard.The Prime Minister and the government must answer, he said.He said nearly 80 people have died due to demonitisation move while standing in queues.Leader of Opposition Azad said this is the first time when such an announcement has been made and the Prime Minister has not given a statement in the Parliament.Such an important decision was announced after the ongoing Winter Session was called for and before it actually began, he said.He said the opposition has demanded discussion over the move to demonetise Rs 500 and Rs 1000 notes in both the Houses, but in the presence of the Prime Minister since he has announced the move.He said some are saying that the Cabinet was not informed and even the Finance Minister did not know. Then how can the Finance Minister reply to the points raised by the opposition, Azad added, insisting on the presence of the Prime Minister.Taking a dig at Modi, he said he can even come to the Parliament Library for events and address every rally in Uttar Pradesh but can’t come to the House.As Congress’ sloganeering followed, Minister of State for Parliamentary Affairs Mukhtar Abbas Naqvi said the government is ready for discussion like always.He said the opposition had failed in its ‘Aakrosh Diwas’ on the streets, so it was disrupting the House proceedings.Following the ruckus, Kurien adjourned the House till tomorrow morning.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Senior Congress leader P Chidambaram on Sunday said had he been the Finance Minister, he would have resigned from the post if the Prime Minister insisted on demonetization.”Had the Prime Minister told me ‘I have decided to declare as illegal tenders Rs 1,000 and Rs 500 currency notes’, my advice to him would have been not to do it. Don’t take the decision. “I would have given him facts and figures. But, had he still said ‘Sorry, this is my decision and I will do it’, let me tell you quite candidly, I would have resigned,” said the former Union finance minister. He was replying to a question at the Delhi Literature Festival on what would he have done had he been in Union Finance Minister Arun Jaitley’s place.Attacking the government over demonetization, Chidambaram claimed that the move will not meet the objectives of curbing corruption, counterfeit currencies and black marketeering as spelt out by Prime Minister Narendra Modi. However, he added that the “only short-term benefits” of it would result in people shifting towards digital transactions in the urban areas. Criticising the Centre, Chidambaram claimed that sufficient information on the ramifications of demonetization was not provided to the Prime Minister and added that even the Chief Economic Advisor was not aware of the move.He said when he held the office of the Finance Minister, it came to his knowledge that one of his predecessors had constituted a committee on demonetization, but did not name the predecessor or specify the period.Chidambaram has presented nine Union budgets. “The report of the CBDT was against demonetization. No one considered demonetization,” he said, adding that similar steps were taken in 1946 and again, in 1978 during Morarji Desai’s regime.Chidambaram said while the demonetization decision was taken in utmost secrecy, it would be wrong to assume that no one in the opposition could have been taken into confidence. “If you can’t consult the opposition, the government should have consulted its own former finance minister Yashwant Sinha. It should have asked former prime minister Manmohan Singh. A decision of this magnitude ought to be taken at least (in consultation) with Sinha and Singh,” he said.The Congress leader said although the Prime Minister has asked for 50 days for the situation to ease out, “putting the poor under this for 50 days is torture”. “If you take away the livelihood of the poor for 50 days…there is a dimension to every economic decision the government takes as well as ethical and political dimensions. “Some decisions may be inherently good, but if they are ethically or morally sad, then the governments oblige by not taking such decisions.”If you have taken a decision, which has virtually driven a large number of people to borrow money, then it’s completely unethical, immoral,” Chidambaram said. The Congress leader said merely opposing the government’s demonetisation decision did not make him or his party “supporters of black money”. He said somebody should have told the Prime Minister that you cannot withdraw 86 per cent of the currency notes (from circulation) overnight and not infuse the number of notes in a few days.”I don’t think the Prime Minister was told that the two high denomination notes accounted for 86 per cent of the cash in circulation. I don’t think he was told that you would be withdrawing 2,300 crore notes, but the capacity of the printing press is 300 crore per month and it will take seven months to match up to that figure,” said the former Union finance minister.