FINANCE MINISTER

modi-govt-2.0-outlining-a-growth-story:-drive-conveniently,-drive-easy

Modi Govt 2.0 outlining a growth story: Drive conveniently, drive easy

India needs an investment ranging from $5 to 10 trillion to develop its infrastructure, science, agriculture, industry, and commerce to a point where the per capita GDP improves from $2000 to $20,000 in the next 10 years. Where will, or could, this money come from? Only from the US, Europe, and East Asian countries like Japan and South Korea. Forget about China. Let it invest in Pakistan.

 

That being the reality, New Delhi may have to work really hard and pragmatically in the next few months to streamline its economic reform agenda and tune the foreign policy accordingly. The concept of economic nationalism is good, but it has to be distilled too often through pragmatism to turn on its potency.

 

Currently, Europe, which could be one of the major financiers to India's growth story, has been waiting helplessly for the last 15 years for a free trade agreement. Similar is the story of trade relations with the US which has expressed its great displeasure by withdrawing the GSP trade scheme. Trade relations with Japan and South Korea are good but not without creases. 

 

In all cases, irrelevant issues have been raised by negotiating officials. So the matter needs to be sorted out at the government and ministerial levels.

 

The US move to withdraw GSP on India's exports to that country has only added urgency to the matter of redefining India's relations with financing countries. No great achievements would be made if New Delhi tries to woo Chinese capital, which is already tied with financing India's adversaries and enemies.

 

The US president is known for his transactional nature. Since the US played a pivotal role in backing France-sponsored Western move to blacklist Masood Azhar by taking the issue to the larger UNSC, which would have made China explain the reasons for its 'constructive support' to Azhar, China blinked and backed off because it had no valid reasons for imposing its willful and malicious hold on Azhar's blacklisting.

 

For a much-needed favor shown to India, Trump naturally wants reciprocal favor. And like always, New Delhi is whining and grumbling. Instead of sending the new foreign minister Jaishankar to Washington to handle the matter urgently and negotiate a win-win deal on minor trade issues that could snowball into bigger problems, spinmasters are trying to convey that the move may not be much damaging.

 

The commerce ministry has said and believes that the GSP withdrawal may impact marginally as the total duty reduction under the scheme was only $190 million a year on the trade value of $6.3 billion. Since, in 2018, India had a goods trade surplus of $21.3 billion with the US, the ministry is not bothered about the fact that what begins as a trickle could become a powerful trend. Look at our trade deficit with China: it began as a trickle 15 years ago and now it costs a huge $70 billion that empowers China to freely finance our adversaries, enemies, and internal saboteurs.

 

New Delhi doesn't seem to have played its hands deftly during the first NaMo term 2014-19 on issues that concern the West, which remains the largest source of FDI, FPIs, technology, IT, and outsourcing businesses. In 2018, for instance, it created avoidable tax hurdles in the functioning of Amazon. It really sent out a wrong signal that it was being done to protect domestic e-commerce and other retail businesses. After the Vodafone incident, this was the second instance of creating unnecessary tax problems for major foreign operators. In both cases, the FinMin was run by lawyers.

 

So, in a sense, it's a great relief that the FinMin has come to be occupied by Nirmala Seetharaman who understands the complexities of global finance and business.

 

Looks like she may get adequate support from the new foreign minister who after retirement was put on probation in learning the ropes of international finance and trade at Tata Sons. This couldn't but have been done with an agreement between Ratan Tata and Narendra Modi. Possibly, Modi's first term taught him that he needed a foreign minister who could deal with global businesses as proficiently as he dealt with politics. And so, he must have organized Jaishankar's appointment on Tata Sons. 

(By M K Shukla & Rakesh Ranjan)

02 Jun 2019
arun-jaitley-recluses-himself-from-the-new-modi-government!

Arun Jaitley recluses himself from the new Modi government!

New Delhi: One of the senior most BJP leaders and finance minister in the outgoing government Arun Jaitly has decided to opt out of the new government at the centre despite the resounding victory of the National Democratic Alliance. Jaitley has been the most trusted man of Prime Minister Narendra Modi after party president Amit Shah and defended the government on many crisis situations.

Sources said that Jaitley has already communicated to the Prime Minister that he won’t be able to join his ministry due to health reasons. His health has not been allowing him to take any big responsibility. In a situation where the finance ministry is vacated by Jaitley then Piyush Goyal is the strongest contender but it is also learnt that PM does not want him to give this responsibility to him.

So there are chances that party president Amit Shah might be entrusted with the responsibility of finance minister however the PM wants him to continue with the same responsibility. But Cabinet Committee on Security (CCS) is likely to remain more a less unchanged despite the fact that Sushma Swaraj did not contest Lok Sabha election. She is another leader who might ask to recues from the ministry.

Jaitley has been continuously missing from the ministerial responsibility even the last budget was presented by Piyush Goyal while Jaitley presented most of his earlier budgets sitting due to health reason. Swaraj had already excused herself from contesting Lok Sabha elections. If Amit Shah takes up ministerial responsibility then J P Nadda might be given the responsibility of party president.

Chances of Amit Shah donning ministerial responsibility is speculated because his another term will complete two years before the next Lok Sabha elections as BJP president can get only two consecutive terms so next election under another president would be risky so Amit Shah might take up the responsibility just before the 2024 Lok Sabha elections. 

24 May 2019
modi-govt-2.0-outlining-a-growth-story:-drive-conveniently,-drive-easy

Modi Govt 2.0 outlining a growth story: Drive conveniently, drive easy

By IndianMandarins 02 Jun 2019

India needs an investment ranging from $5 to 10 trillion to develop its infrastructure, science, agriculture, industry, and commerce to a point where the per capita GDP improves from $2000 to $20,000 in the next 10 years. Where will, or could, this money come from? Only from the US, Europe, and East Asian countries like Japan and South Korea. Forget about China. Let it invest in Pakistan.

 

That being the reality, New Delhi may have to work really hard and pragmatically in the next few months to streamline its economic reform agenda and tune the foreign policy accordingly. The concept of economic nationalism is good, but it has to be distilled too often through pragmatism to turn on its potency.

 

Currently, Europe, which could be one of the major financiers to India's growth story, has been waiting helplessly for the last 15 years for a free trade agreement. Similar is the story of trade relations with the US which has expressed its great displeasure by withdrawing the GSP trade scheme. Trade relations with Japan and South Korea are good but not without creases. 

 

In all cases, irrelevant issues have been raised by negotiating officials. So the matter needs to be sorted out at the government and ministerial levels.

 

The US move to withdraw GSP on India's exports to that country has only added urgency to the matter of redefining India's relations with financing countries. No great achievements would be made if New Delhi tries to woo Chinese capital, which is already tied with financing India's adversaries and enemies.

 

The US president is known for his transactional nature. Since the US played a pivotal role in backing France-sponsored Western move to blacklist Masood Azhar by taking the issue to the larger UNSC, which would have made China explain the reasons for its 'constructive support' to Azhar, China blinked and backed off because it had no valid reasons for imposing its willful and malicious hold on Azhar's blacklisting.

 

For a much-needed favor shown to India, Trump naturally wants reciprocal favor. And like always, New Delhi is whining and grumbling. Instead of sending the new foreign minister Jaishankar to Washington to handle the matter urgently and negotiate a win-win deal on minor trade issues that could snowball into bigger problems, spinmasters are trying to convey that the move may not be much damaging.

 

The commerce ministry has said and believes that the GSP withdrawal may impact marginally as the total duty reduction under the scheme was only $190 million a year on the trade value of $6.3 billion. Since, in 2018, India had a goods trade surplus of $21.3 billion with the US, the ministry is not bothered about the fact that what begins as a trickle could become a powerful trend. Look at our trade deficit with China: it began as a trickle 15 years ago and now it costs a huge $70 billion that empowers China to freely finance our adversaries, enemies, and internal saboteurs.

 

New Delhi doesn't seem to have played its hands deftly during the first NaMo term 2014-19 on issues that concern the West, which remains the largest source of FDI, FPIs, technology, IT, and outsourcing businesses. In 2018, for instance, it created avoidable tax hurdles in the functioning of Amazon. It really sent out a wrong signal that it was being done to protect domestic e-commerce and other retail businesses. After the Vodafone incident, this was the second instance of creating unnecessary tax problems for major foreign operators. In both cases, the FinMin was run by lawyers.

 

So, in a sense, it's a great relief that the FinMin has come to be occupied by Nirmala Seetharaman who understands the complexities of global finance and business.

 

Looks like she may get adequate support from the new foreign minister who after retirement was put on probation in learning the ropes of international finance and trade at Tata Sons. This couldn't but have been done with an agreement between Ratan Tata and Narendra Modi. Possibly, Modi's first term taught him that he needed a foreign minister who could deal with global businesses as proficiently as he dealt with politics. And so, he must have organized Jaishankar's appointment on Tata Sons. 

(By M K Shukla & Rakesh Ranjan)

arun-jaitley-recluses-himself-from-the-new-modi-government!

Arun Jaitley recluses himself from the new Modi government!

By IndianMandarins 24 May 2019

New Delhi: One of the senior most BJP leaders and finance minister in the outgoing government Arun Jaitly has decided to opt out of the new government at the centre despite the resounding victory of the National Democratic Alliance. Jaitley has been the most trusted man of Prime Minister Narendra Modi after party president Amit Shah and defended the government on many crisis situations.

Sources said that Jaitley has already communicated to the Prime Minister that he won’t be able to join his ministry due to health reasons. His health has not been allowing him to take any big responsibility. In a situation where the finance ministry is vacated by Jaitley then Piyush Goyal is the strongest contender but it is also learnt that PM does not want him to give this responsibility to him.

So there are chances that party president Amit Shah might be entrusted with the responsibility of finance minister however the PM wants him to continue with the same responsibility. But Cabinet Committee on Security (CCS) is likely to remain more a less unchanged despite the fact that Sushma Swaraj did not contest Lok Sabha election. She is another leader who might ask to recues from the ministry.

Jaitley has been continuously missing from the ministerial responsibility even the last budget was presented by Piyush Goyal while Jaitley presented most of his earlier budgets sitting due to health reason. Swaraj had already excused herself from contesting Lok Sabha elections. If Amit Shah takes up ministerial responsibility then J P Nadda might be given the responsibility of party president.

Chances of Amit Shah donning ministerial responsibility is speculated because his another term will complete two years before the next Lok Sabha elections as BJP president can get only two consecutive terms so next election under another president would be risky so Amit Shah might take up the responsibility just before the 2024 Lok Sabha elections. 

novel-rbi-way-to-buy-peace-with-finmin

Novel RBI way to buy peace with FinMin

By IndianMandarins 21 Nov 2018

The RBI is said to have bought peace with the desperately hawkish FinMin by relieving the pressure on the Centre government finances by way of capital infusion.

 

If it had continued with the capital conservation buffer (CCB) mandate of 2.5 percent by March 2019, the Centre would have had to provide an additional Rs 36,000-odd crore for banks' capital infusion (based on Common Equity Tier CET levels as of September 2018).

 

This burden is now reduced by about Rs14,000 crore by the RBI board's decision to tinker only with the CCB and not the much-debated higher capital requirement of 9 percent for banks.

 

It is argued that CCB relief will only benefit very few banks that currently maintain the CCB higher than the mandated requirement of 1.875 percent. One rudimentary calculation shows that the move has relieved the pressure on the Centre’s fiscal by about Rs14,000 crore, it is unlikely to boost lending by freeing up capital for PSU banks.

fin-min-seeks-input-to-prepare-2019-20-budget

Fin Min seeks input to prepare 2019-20 budget

By IndianMandarins 29 Oct 2018

The Finance Ministry has sought adequate inputs from different central ministries forArun Jaitley’s Budget Speech, which would be the last budget of the current BJP-led NDA government before the 2019 general polls. Earlier this month, the ministry began the budgetary exercise for 2019-20. Meetings will be held with ministries of steel, power, and housing and urban development to finalise revised expenditure for the current fiscal and projections for the next financial year. The meetings are scheduled to continue till November 16. The General Budget is presented on February 1.

 

The finance ministry has requested the ministries to send material related with their departments that may merit inclusion in the finance minister’s budget speech for 2019-20 by November 15, according to a communication by the finance ministry to all secretaries. In view of the upcoming General Elections, the government is likely to come out with an interim budget also referred to as Vote-on-Account.

 

Finance Minister Jaitley is scheduled to present his 6th consecutive Budget with 2019 being Vote-on-Account.

 

As per practice, a Vote-on-Account or approval for essential government spending for a limited period is taken in an election year and a full-fledged budget presented by the new government.

 

Ministries are now allocated their budgeted funds from the start of the financial year beginning April. This gives government departments more leeway to spend as well as allow companies time to adapt to business and taxation plans.

swamy's-letter-to-arun-jaitley-sparks-controversy

Swamy's letter to Arun Jaitley sparks controversy

By IndianMandarins 27 Sep 2018

As per the media reports Rajya Sabha member Subramanian Swamy has written a letter to Finance Minister Arun Jaitley seeking prosecution of Revenue Secretary Hansmukh Adhia.


In his letter, Swamy has elaborated that role of Adhia is subject to public scrutiny. Swamy has urged Jaitley to prosecute Adhia under Section 197 of CrPC and Section 19 Prevention of Corruption Act.

 

"The Punjab National Bank (PNB) scam, as it is popularly known today, is about the grant of Letters of Undertaking (LoUs) by the bank to the companies of Nirav Modi and Mehul Choksi for a fraud involving Rs 11,000 crore. Presently, both of them are absconding. The said individuals and their companies are being investigated by the Central Bureau of Investigation (CBI). Enforcement Directorate (ED), Income Tax (IT) and the Directorate of Revenue Intelligence (DRI). Three of the above mentioned four agencies work under the aegis of the Finance Ministry, and directly report to Adhia," Swamy wrote in his letter to Jaitley.

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